The fire at Lara, near Geelong, is not suspicious but is being treated as a tragic accident.
The 74-year-old man who died had been caring for the boys when the fire broke out about 4.30am on Monday.
No one else was there at the time and it's believed all three were asleep when flames took hold of the back of the property.
Detective Senior Sergeant Mark Guthrie said the surviving boy was "extremely lucky" to have escaped and was in the care of his mother.
"The mother is devastated, probably can't really describe how she's feeling at the moment," Det Sen Sgt Guthrie told reporters.
"We'd all probably feel the same way. She's caring for her son at this stage who is also traumatised."
The cause is still under investigation but an electrical fault has been ruled out.
"We believe that they were all asleep, one's been able to notice some fire or smoke and tried to get the other two (out)."
Firefighters at the scene told Det Sen Sgt Guthrie it was one of the most intense house fires they had seen.
"It's tragic, we're all human. We've all got families so it affects us in a way as well," he said when asked about the impact on emergency services.
"So it's bad for everyone, especially a small community like here in Lara."
Detectives from the arson squad and fire investigators have spent the day scouring the scene for evidence.
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