It happened around 12:30 in the 12000 block of East Harrison Street in Oakland City.
Firefighters say it appears the fire started on one side of the home, and quickly spread.
The heat even caused some damage to the home next door.
Patrolman Michael Collins with the Oakland City Police Department says the flames cinged the top of a tree, and it could have potentially lit the neighboring house on fire. It had already melted the siding. It could have been a danger for the people sleeping inside this house and the house next to it.
Nobody was inside at the time.
In fact, firefighters say the home was in the process of being torn down.
The flames caused power lines in the area to arc, knocking out power to surrounding homes.
Duke energy had power restored within 30 minutes.
The cause remains under investigation.