Flames shot through the roof of the home on Rosa Parks Boulevard in Paterson just after 3:30 a.m.
The fire started in an unoccupied home before it jumped to two neighboring structures.
Firefighters were pouring huge amounts of water on the fire in a purely exterior attack, and the center building, which was occupied, appears to have suffered extensive damage.
Constance Washington, who lived in the middle building, described the chaotic scene she woke up to.
"My brother woke us up, yelling, 'The house is on fire!'" she said. "And when he said the house was on fire, I looked at the dining room, and all I could see was that house on the corner is on fire. And everything from the kitchen, you could see all the fire coming in."
All the residents - five adults, three children and two dogs - were able to escape the flames safely, and no injuries were reported.
The cause of the fire is under investigation, but it has been deemed suspicious because it erupted in the occupied home.