Oops copied from the old thread as I didn't see a new one:
OP I'm glad your partner is so supportive.
What you need to hold onto is that if her behaviour right now is not respecting your boundaries or your mental health then the situation would be far worse if she were to move in.
This is not about refusing to help a friend in need.
This is about a "friend" trying to take advantage of you and your partner and using emotional blackmail to do so.
It's one thing being able to fend that off from a distance (as difficult as that has been for you) and quite another if (as is likely) she does so whilst living with you.
It's completely unreasonable to make yourself homeless and expect to stay rent free with a friend for an indeterminate amount of time to save up money for her next house (and seemingly expect her partner to also benefit from this arrangement - "It will be fun", no, it will be hell).
If you let her move in she will not leave. She will not respect your home, your boundaries, your privacy or your feelings.
She's not crying on the phone because you've let her down and she deserves more from you.
She's crying because she doesn't care about you. She doesn't care about anyone but herself and getting what she wants irrespective of the cost (both emotional and financial) to anyone else.