I am the person who found and named Hellhouse about ten years ago. I made this discovery by pure chance back in 2007. It's said on the wiki that it's been proven that this house cannot set people on fire.
Look at my video below. It was recorded back in 2006 and uploaded 2007 on Youtube back in 2007. Hellhouse is at 1:41 in the video. The player is set on fire two times in a row. What is required, if I remember it correctly, was a three-star wanted level. Then one has to run around the house and eventually the player will be set on fire. I do not remember if it happened at any particular time, day or weather, though. Also be advised that this was recorded on the Playstation 2 system - therefore no guarantee that it will work on PC or even Xbox.