The children, aged 10, 12 and 13, are being treated in hospital after fleeing the blaze near Llangammarch Wells just after midnight on Monday.
The fire service and police said a number of people were still unaccounted for but confirmed some had died.
The cause of the fire at the property between Llanwrtyd Wells and Builth Wells is unexplained.
A joint statement from Dyfed-Powys Police and Mid and Wales Fire and Rescue Service said the children who escaped had non-life threatening injuries, but said other people were still missing.
The statement added: "Due to the severity of damage at the scene we are unable at this stage to identify any of the deceased or confirm numbers.
"Specialist scientists and fire investigators are still assessing the scene prior to further investigation. At this time we are treating the cause of the fire as unexplained.
"Further details will be made available when they are confirmed."
The Welsh Ambulance Service sent its Hazardous Area Response Team, as well as four ambulances crews and an ambulance officer to the scene.
Community councillor Jon Hather said: "It's a dreadful shock for this small community and our thoughts go out to the family."
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