Police are investigating a case of suspected premeditated arson after the fire in Buch in northern Berlin which was reported to emergency services shortly after 3am on Monday.
Six residents of the home suffered light injuries as a result of smoke inhalation and had to be treated by paramedics at the scene, according to police.
The fire broke out in a shipping container in which refugees were housed on the first floor of the building. It then spread to the second and third floors.
The 185 resident of the home have been rehoused in a sports hall in Pankow, Tagesspiegel reports.
Arson attacks on refugee homes greatly increased in 2015, with the Interior Ministry describing them as part of an explosion in the rate of extremist violence.
But in one arson case in Düsseldorf in June, eight residents of the home were arrested on suspicion of starting the fire in a fight over Ramadan meal times.