Everybody has been accounted for after the blast, which led to the evacuation of dozens of properties in Birstall, north of Leicester.
Nearby homeowners described being woken up by a huge “bang” which shook doors and windows.
Leicestershire Fire Service said one semi-detached property had been “involved in gas explosion”.
A neighbouring property also partially collapsed and six other properties had been affected, it said, adding that no fire or smell of gas had been reported.
Carol Cooke, who lives on nearby Wanlip Lane, told the Press Association she was woken by an “almighty bang” at about 7.30am.
She said: “I thought something had happened in the house, then we just heard lots of sirens and saw emergency services going up our street.”
Ms Cooke, 46, added: “Hearing the bang was not nice, it was very scary. It’s very shocking news, we are praying for the families involved.”
Sarah Carr, of Halfpenny Close, about a mile from Allington Drive, added: “I thought it was a car crash, the whole house and doors shook.
“It sounded really loud, like it was right outside my house. I then saw the air ambulance and police helicopter.”
Steve Ballinger of Leicestershire Fire Service said everyone had now been accounted for.
He said: “Three people have been injured and they are on their way to hospital.
“There has been one total collapse and one partial collapse. Houses 51 to 81 and 42 to 64 on Allington Drive have been evacuated.”
All those evacuated have been asked to go to the village hall and locals have been asked by Charnwood Council to help by taking blankets.
Leicestershire Police said investigations into the cause of the damage were in their “very early stages”.