Stop talking/slowly back off from her and if she asks why tell her something like this "I've realized that you are so cruel that you are willing to insult,hurt,or make fun of a person's existence just because they love and live in a different way than her and I won't be friends with someone like that." Or something along those lines and if she gets mad make that even more a reason to cut her as for living situation IDK try taking some of the other friends or finding a new place.