Forensic experts in Porto Alegre are working to determine the cause of the blaze and identify the victims.
Emergency workers on Friday confirmed 10 victims at the Garoa Floresta, which was operating without proper authorisation, according to the fire department for Rio Grande do Sul state.
The fire broke out around 2am local time (05:00 GMT), officials said. It took firefighters around three hours to bring it under control.
“Forensic experts are at the scene to identify the victims and investigate the cause of the fire,” the fire department said in a statement.
Porto Alegre Mayor Sebastiao Melo wrote on X that multiple injured people were rescued and taken to the hospital, but did not say how many.
Health authorities later on Friday put the number of injured at 13, some in serious condition.
Images shared by Brazilian media outlets from overnight showed the building engulfed in flames as firefighters battled to extinguish the blaze.
“I only had time to put on my flip-flops and run. My sister, who lived on the third floor, ended up being burned to death,” 56-year-old Marcelo Wagner Schelech told local newspaper Zero Hora.
“It happened very fast. People yelled ‘fire!’ When I saw it, it was already two doors from mine. I ran out as fast as I could, because there was already a lot of smoke,” an unidentified resident of the building also told news website G1.
State Governor Eduardo Leite vowed to investigate the incident.
“The fire department dispatched five trucks and dozens of firefighters to fight the flames,” he wrote on social media.
“We will continue working on the aftermath of this tragedy and the investigation of the causes. My condolences to the victims’ families.”
Brazilian President Luiz Inacio Lula da Silva sent his condolences to the victims’s families, saying in a post on social media that the tragedy left him “saddened”.
Meanwhile, state lawmaker Matheus Gomes accused the city government of funding the homeless shelter even though it had faced reports of noncompliance with regulations “for years”.
“There needs to be an investigation not only into the fire, but the entire chronicle of this tragedy foretold,” Gomes wrote on X.
The building is part of the Garoa group, which has at least 10 small hotels in Porto Alegre.
In 2022, a fire broke out in another one of the hotels, killing one person and injuring 11.