The building on fire is the three-story Francis Drake Hotel in downtown Minneapolis, tweeted the Minneapolis Fire Department, which responded to the fire at around 3 a.m. CT (0900 GMT) and upgraded the situation to a four-alarm fire about three hours later.
According to local media reports, about 250 residents were displaced after the fire tore through the hotel, which provides temporary shelters or long-term apartments for the homeless.
Three people were hospitalized and seven more were being treated on the scene, fire officials were quoted as saying
"The only word that comes to mind this morning is heartbreaking," Minneapolis Mayor Jacob Frey tweeted. "As our firefighters work to contain the blaze, at the Francis Drake Hotel, we already know several hundred lives have been changed."
The cause of the fire is still unknown. The Minnesota Red Cross is helping with relocation efforts, calling for donations to support those affected.