My theory is that he is Regina’s brother. Since it is confirmed that Cora is the miller’s daughter, I believe that this is the baby she and the king had that she was able to break her deal with. Since it was before Rumple, I think the whole Miller’s daughter story took place with the Dark One, instead of Rumpelstilskin. I think she won her first deal and got to marry the king, but later, say….the kingdom needing money, or something, she went back to the Dark One for another deal. She again put Bae on the line. But this time it was for magic, not gold or marriage. I think that Cora gave Bae to Rumple because he was HER brother too, to protect him from the Dark One and with her new magic powers, created the knife to be able to control him. Thus being able to get out of her second deal without losing her baby. Unfortunately, like Rumple says, All magic comes with a price. Cora’s price was evilness. She became so engrossed with power and stature that she forgot about Bae and/or told Rumple to tell the boy that his mother ran away. We are never told who his mother is.
If this is true(or some form of it anyway) That would effectively make Regina, Henry’s aunt. Bae, his father and Rumple, his grandfather. He may be sheilded from any real magic powers but it will be a struggle for him to fight off the evil tendencies that is in his family genes.