Can a borrower rent a property to his co-borrower?

[Rick Borgo]

The scenario is like this:

Brother and Sister own a property together. Both are on the mortgage. The brother co-signed as the sister did not have enough income/credit at the time. The sister, a W2 employee, currently occupies the home with her husband (who is paid income under the table, supposedly). Because of this, the brother has always made the mortgage payments directly from his own bank account. 

The brother lives rent free with his parents and does not have any ownership of the parent's property. The brother now wants to buy his own Primary Residence, but I am unsure if I need to count the first mortgage payment against him or if I could have him lease it to his sister (since she is on the mortgage). Any suggestions for this?