An eyewitness video taken at the scene showed the flames shooting out of the back portion of the building, which is mainly used for storage.
Resident Ismael Porto-Herrera was one of two people inside when the incident happened. He said he was watching television on the first floor, when he heard an explosion and jumped into action with another man.
Porto-Herrera said they ran out when they saw the fire and then tried to put it out themselves with water, but the flames were too intense so they called for help.
When firefighters arrived minutes later, they said they saw heavy smoke. The flames heavily damaged the house.
"They made an interior attack and they extinguished the fire," Raleigh Fire Department Division Chief Brad Harvey said.
The fire department says three people have been displaced and the Red Cross is assisting them.
The cause of the fire is still under investigation.