Six-month-old Kimberley Buckley, her mum Kayleigh, 17, and grandmother Kim, 46, perished in the blaze near Cwmbran, South Wales.
The family had just welcomed home Kayleigh after she was born prematurely at just 1lb 9ozs in hospital.
She was one of twins born three months premature. Her twin sister Rose weighed just 15oz and died just two days after being born.
The family's three-bedroomed home was decked out in 'Welcome Home' banners for the mum and baby who had been home just a few hours when the fire started.
Neighbours heard Kayleigh screaming 'Help, us, help us' at 3.30am as the fire ripped through the house. Firefighters discovered the three bodies in the gutted top floor.
Police arrested a man near the scene while the house still burned.
A close family friend said: "Kayleigh had the twins three months prematurely. One weighed just a one and half pounds and the other was even lighter.
"But little Kimberley was a battler despite being just 1lb 9oz when she was born.
"It was touch and go for a long time - they have been back and for to the hospital for months and months.
"Kim was very supportive and did everything she could for her daughter and grandchild.
"That's why Kayleigh chose the name Kimberley - in honour of her own mum.
"She was so pleased to have her coming home on Monday - she put balloons and banners up saying: 'Welcome home Kayleigh and Kimberley'."
A Gwent Police spokesman said: "The people confirmed deceased inside the address were two adults and one infant.
"Fire service and Gwent Police forensic investigations will begin this morning and officers will also be conducting house-to-house inquiries in the area.
"A 27-year-old man has been arrested on suspicion of arson with intent to endanger life and is currently in custody."
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