Witnesses described seeing a plume of smoke as the four- seat Robinson 44 craft plunged to the ground and appeared to clip the roof of one home before skidding along the ground at an intersection and smashing into another house.
A nearby resident told the local ABC7 news channel it "sounded like a train coming through." Upon arriving at the scene she said she "saw one man out, I'm not sure if he fell out, and there was body parts."
The woman said the residents of the home that was struck were there, but were in another part of the property and were unharmed.
Details of the moments leading to the crash and the cause were not immediately clear but Chip Duncan, the fire chief in Newport Beach, confirmed three people had died and two others had been taken to hospital with unknown injuries.
Newport Beach is a coastal city of around 85,000 in Orange County, some 65 kilometres southeast of downtown Los Angeles.
The helicopter is owned by Revolution Aviation, which says on its website it has been operating since the 1960s, offering pilot training and sightseeing trips. The website boasts a 100 per cent safety record.
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