The 'I Will Always Love You' star, who died on Saturday (February 11) at the age of 48, was named as an inspiration by Francis during her stint on the show and the two even shared a stage together back in 1999.
However, it has been claimed that the pair came close to blows when they reunited at an LA pre-Grammy event hosted by singer Kelly Price on Thursday (February 9), due to Houston failing to recognise the aspiring singer.
Eyewitnesses claim that Houston "got belligerent" when R&B star Ray J tried to defend Francis and "hands were raised".
"It didn't seem like Whitney remembered her, but she was cordial at first," a source told The Hollywood Reporter. "[But] Whitney just got belligerent.
"Ray was trying to defend Stacy, telling Whitney, 'Stacy's family!' but Whitney was feeling crowded out and hands were raised... You didn't know which way it could go there for a minute."
Francis, who said after the incident that she had the "utmost respect for Whitney Houston and her talent", took to Twitter upon hearing of the iconic performer's death and lamented how their final meeting had ended.
"This is a sad time for me. I loved Whitney Houston with all my heart," she wrote today (February 13). "She was such an amazing musical influence for me.
"I deeply regret the events that led to Thursday's misunderstanding, but I respect and love her more than I can say... Whitney maintained a genuineness in this difficult profession and I will always admire and respect the courage that she lived.
"At this painful time, I would like to express my support and most sincere condolences to Whitney's family in learning of her sudden death... I will always remember her to be a deeply humane person and wish her spirit to rest in peace."
X Factor USA boss Simon Cowell confirmed at the weekend that Houston was in talks to join the show's judging panel.
Watch footage of Whitney Houston's last public performance with Kelly Price below: