Two people who had spoken to the singer's family said they had raised the possibility of holding a wake on Thursday and a funeral on Friday at Newark's Prudential Centre, which hosts college and professional sporting events and seats about 18,000 people.
City officials said they were awaiting the family's arrival to complete the funeral planning.
A picture of Houston, 48, appeared on the electronic board outside the arena with a New Jersey Devils game scheduled for Friday night - posing a logistical challenge to a funeral that day.
The pop star was found dead in a bath in her suite at the Beverly Hilton Hotel in California on Saturday, hours before she was supposed to appear at a pre-Grammy Awards gala.
Funeral arrangements were being made by Newark's Whigham Funeral Home, which handled the 2003 funeral of Houston's father John, according to the sources.
A woman at the funeral home, where several police officers were stationed, said she could neither confirm nor deny reports that it would handle the arrangements. A white tent was set up leading into the rear entrance.
Houston fans went to the funeral home, where they played her songs, sang and lit candles to remember her.
The Los Angeles coroner's office said Houston's body was released to the family yesterday and police said the body was taken to a Los Angeles-area airport in the afternoon.
Houston was born in Newark and was raised in nearby East Orange. She began singing as a child at Newark's New Hope Baptist Church, where her mother, Grammy-winning gospel singer Cissy Houston, led the music programme for many years. Her cousin singer Dionne Warwick also sang in its choir.
Yesterday mourners left flowers, balloons and candles for Houston at the wrought-iron fence around the tall brick church, which sits near the edge of an abandoned housing project near the train line leading to New York City.
Across the street from the church, Bashir Rasheed set up shop with a bag full of T-shirts reading In Memory of Whitney Houston 1963-2012. He said he had sold 24 shirts at 10 dollars (£6.36) each within a few hours.
Houston was found underwater and apparently unconscious when she was pulled from the hotel bath, and had prescription drugs in her room, authorities said yesterday.
An autopsy was carried out on Sunday and there were no indications of foul play and no obvious signs of trauma on her body. It could be weeks, however, before the coroner's office completes toxicology tests to establish her cause of death.
The singer had struggled for years with cocaine, marijuana and pills, and her behaviour had become erratic.
The White House said President Barack Obama's thoughts and prayers were with Houston's family, especially her daughter. Press secretary Jay Carney paid tribute to the singer's “immense talent” and called it a tragedy to lose somebody so gifted at such a young age.
Houston's death is a sad rewind of what befell Michael Jackson and Amy Winehouse. It took three months for a London coroner to rule that Winehouse drank herself to death last July. A powerful anaesthetic was quickly linked to Jackson's June 2009 death and three months ago, Jackson's doctor was convicted of involuntary manslaughter.
Houston's death tinged the Grammy ceremonies with sadness. It also probably boosted viewership, which was 50% higher than last year, with nearly 40 million viewers tuning in to the program on CBS.
A sensation from her first album, Houston was one of the world's best-selling artists from the mid-1980s to the late 1990s, turning out such hits as I Wanna Dance With Somebody, How Will I Know, The Greatest Love of All and I Will Always Love You. But as she struggled with drugs, her majestic voice became raspy, and she could not hit the high notes.
Mourners left flowers, balloons and candles at the wrought-iron fence around the tall brick Newark church where she got her start. It sits near an abandoned housing project and the train line leading to New York City.
“She was an inspiration to everybody,” said Gregory Hanks, an actor who grew up in the neighbourhood and who dropped off a bouquet. He saw Houston perform in New Jersey years ago.
“I grew up listening to her as a little boy, and to hear her sing, you knew she was special,” he said.
A hearse under heavy police escort arrived at the funeral home after a journey from from Teterboro Airport, where officials had said Houston's body would arrive.
Houston's relatives were also debating whether to have a smaller service at New Hope Baptist Church, where family members have sung. according to someone who had knowledge of the planning.
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