Lee says the grandmother was helping to care for the infant. Cadaver dogs are still searching for the body of another daughter, identified as 15-month-old Grace Yoon.
The San Diego County medical examiner's office has not officially released the names of the victims.
Both engines on the jet failed while it tried to land at a nearby Marine base Monday. The pilot ejected before the crash.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
SAN DIEGO (AP) - Both engines of a military jet fighter failed before the aircraft crashed and burned in a residential area, killing three people on the ground as it destroyed two houses, a congressional aide said Tuesday.
Investigators resumed the search for a missing child, believed to be 1 year old, in the wreckage of one house. Neighbors were in shock at the tragedy that befell the child's family Monday, hours after the father kissed his wife and baby goodbye in the driveway.
The twin-engine F/A-18D Hornet went down about two miles from Marine Corps Air Station Miramar.
No official initial finding of the cause of the crash was given, but a congressional aide who had been briefed on the crash said the pilot had been attempting to land at Miramar after his right engine malfunctioned. The aide spoke on condition of anonymity because the information was not yet public.
While the pilot was on final approach to the runway the aircraft also lost thrust from its left engine, and the pilot ejected, the aide said Tuesday.
The pilot ended up suspended by his parachute in a tree. He was being treated at a hospital.
Three people - a mother, her baby and a grandmother - were killed in one house and officials said a fourth person, believed to be a small child, was in the house and had not been found. The search for the child had been suspended during the night.
One other home was destroyed and three were damaged.
Neighbors said the family of Korean immigrants moved into the area about three months ago.
Resident Choko McConnell, 85, a widow who lives down the street, said she often saw the grandmother pushing a child in a stroller.
"I cried all night," McConnell said. "A family perished, a young family."
Michael Rose, 44, said he often spoke with the family and had seen the father kiss his wife and baby goodbye in the driveway just hours before the crash.
"I thought, what a beautiful sight. And then later in the day, they were gone," Rose said.
Amy Hegy, a spokeswoman for the American Red Cross, San Diego, said she spoke to the father of the children when he returned to the gutted home Monday night. Hegy said he was "calm" and stayed with friends. She also said the man had extended family in San Diego but would not reveal further details.
Military aircraft frequently streak over the neighborhood, two miles from the base, but residents said the imperiled aircraft was flying extremely low.
The San Diego County Medical Examiner said it had tentatively identified each of the victims and was in contact with family members for confirmation. No names were released.
The pilot, who ended up hanging by his parachute from a tree in a canyon beneath the neighborhood, was in stable condition at a Navy hospital, said 1st Lt. Katheryn Putnam, a Miramar spokeswoman. He had been returning from training on the carrier USS Abraham Lincoln off the coast, she said.
Investigators will review information from a flight data recorder. There was no indication the pilot was using alcohol or drugs, Putnam said.
Dawn Lyons spoke to the pilot just after he landed in the tree.
"I saw an incredibly composed person," Lyons said. "He didn't have any scrapes or bruises. He was very lucid."
There was little sign of the plane in the smoking ruins, but a piece of cockpit sat on the roof of one home, and a charred jet engine lay on the street. Authorities said the smoke wreckage was toxic and about 20 homes were evacuated.
The Navy recently inspected hundreds of F/A-18 Hornets, built by Boeing Co., after discovering "fatigue cracks" on more than a dozen of them. The inspections looked for cracks in a hinge that connects the aileron - a flap that helps stabilize the jet in flight - to the wing.
The Navy announced last month it had grounded 10 of the $57 million fighters and placed flight restrictions on 20 more until repairs could be made.
The supersonic jet is widely used by the Marine Corps and Navy and by the stunt-flying Blue Angels. An F-18 crashed at Miramar - the setting for the movie "Top Gun" - in November 2006, and that pilot ejected safely.