Firefighters went to the home on Rosehill Road just after 6 a.m.
Fred Jones told crews on scene that he and his wife and their younger son were sleeping in their car while his 12 and 14-year-old boys were asleep inside the home.
Jones said he awoke to see flames shooting from the front of the home, and he banged on their bedroom windows to wake the children up.
Jones' landlord said she thought the electricity had been disconnected from the home. Authorities believe an unattended candle started the fire.
The child is being treated at the N.C. Jaycee Burn Unit at UNC Hospital in Chapel Hill.
" The 12 year old was taken to the burn center in Chapel Hill with third-degree burns on his feet and one of his arms I was told," Lynn Milanese of Showcase Restoration said.
As Milanese's repair crews boarded up the burned home, she said it's a miracle it wasn't a death trap.
The landlord told ABC11 she is thankful the house and the belongings are the fire's only victims.
"My heart has been on those kids. I haven't worried about getting stuff done for the house but on the children, making sure the little boy is taken care of. I just pray that all is well with them," said landlord Sheilla Graham.