It sounds as if your mother was used as a front by a relative who for some reason couldn’t ro didn’t want to have the property in his own name. This has definitely messed up your financial aid application.
First of all, make sure that you apply to your in-state public options, and to schools for which you are over-qualified, where you are likely to get major merit money.
As for straightening out the financial mess that your mother is in, I don’t really think that you can. That’s up to her. I suspect that there’s tax evasion behind it, possibly fraud regarding welfare benefits, at the very least hiding of assets in a divorce. It’s a mess you won’t be able to solve. Your mother is made vulnerable by this, too, because if she owns that house that is generating rental income, who is paying the tax on that income? A house that cost 800K would probably rent for 80K/yr. Who is paying the property tax on it? The income tax on that could be as much as 30K/yr, depending upon the recipient’s income and state residence. Ultimately, the owner of the property is the one who should have been receiving the income, and so is liable for the tax. Do you begin to understand how serious this could be?
My point is, best to leave it alone. If your mother truly has NO financial interest in this property, she never put a dime into it, she has nothing to do with it, she could “quit claim” it to the relative who actually owns it. That way, she is out of the mess with that property, going forward. Or if she actually does have financial ownership/interest in that property, she could sell it and use the money to pay for your college, although the relative who used her as a front to buy it, and who collects the rental income from it (putting your mother at risk of prosecution for tax evasion) will probably never speak with her again. Might sue her, too, but probably wouldn’t, out of fear of the consequences, regarding tax evasion and other fraud.
Let the grownups handle their own mess. Let it go. Figure that the most you’re going to be able to get for college is an unsubsidized direct student loan, total of 27K for four years of undergrad. That’s probably all you will qualify for, since that is available to anyone. Plan your applications accordingly, seeking in-state tuition and/or major merit money. In most states, you could get a 4 yr degree with that 27K by doing first two years with AP, CLEP, and at community college and last two at state U, while working a part time job and a summer job.