The fire erupted in an apparently abandoned home on Amherst Street just before 4:30 a.m. Wednesday.
Heavy flames spread to an adjacent home, forcing residents to flee, and damaged at least two others.
Neighbors claim that though the abandoned house was boarded up, squatters were still able to get inside.
"It's been a problem. I complained, I emailed, I called the city. Nothing has been done. Now, all of the sudden the house burns down, I have nothing," resident Mia Clark said.
Clark's daughter witnessed the abandoned house burning, and when the flames spread to the Clark residence, they lost everything.
No injuries were immediately reported.
Firefighters battle house fire in NJ
Some residents were left homeless and were being temporarily housed on an NJ Transit bus.
NewsCopter 7 was over local streets closed by firefighting activity just before dawn.
NJ Transit Bus Route #90 was being detoured due to the fire department activity on Central Avenue and S Clinton Street.
For bus service, commuters were advised to use Halsted, Elmwood and Freeway Drive.
The cause of the fire is under investigation.
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