They cannot be relatives. As for living in the same house I do not know if that is clear. However, if your references are called on the phone, which does happen, and they find that it is the same phone # as yours or the reference lives with you, IMO, they may question it. The references DO need to come from your county of residence. The point is you DO NOT want to raise any red flags. Even if they eventually rule in your favor, like the reference who lives in the same household, it may delay your approval. The approval process is long and unnecessarily complicated enough that you do not want to do anything that will slow it down any further. I used two sets of husband and wife (equaling 4 references) neighbors and one friend to equal my five references.
I took my class with Dave Johnson, of First State Firearms, 302-834-0333. I think it was $150.00. His training was thorough and he got my certificate quickly, plus I had many questions later, which he was happy to talk about by phone. All your detail questions will be answered during the class, which you should take up front.