Advertising or otherwise seeking tenants from a specific source to avoid problem tenants is also redlining. Advertising only in the local graduate student newsletter is redlining though it likely would not get you in trouble. Advertising only in a specific church would be redlining. It's done all the time of course.
Quite right. To clarify - I didn't mean to suggest that the OP should *only* seek specific sources of renters. Step 1, if you are looking to rent out the townhome, would be to place a general interest rental posting - Craig's List, local paper, etc. Then reach out to any specific likely local pools of renters.
OP, sounds like the emotional stress is (almost) as bad as the economic stress for you in this situation. Even though from a $-only analysis selling the townhome now may not be your #1 choice, from a what-will-be-best-for-you-overall analysis selling the townhome may make sense for you. Best wishes for making a decision that you are at peace with! (My earlier rent-to-own suggestion would be something in the middle between $ and stress - less near-term $ hurt than selling outright, less near-term stress than traditional rental, but locks in today's low price & is more management/payment stress than outright sale.)
More on fair housing - In most US areas, unless you are renting out space in a home that you both own and occupy, you can discriminate *only* on economic terms (strictly economic - as long as the source of income is lawful, you can't rule out or discount for example section 8 or alimony - but you can choose between same-credit equal-income tenants based on how reliable you think their source of income would be).
Giving the address is always legally okay (Craig's List lets you post cross streets without the specific address if you wish), but *many* other descriptors may/can be taken as discriminatory.
For example, "close to schools" is a red flag, as you can't discriminate on family make-up and this implies that you are seeking a family with children. Other problem terms - "good neighborhood" can imply racial profiling (strange but true - in part left over from the block-busting activities of the 1970s), "family street" is child-targeted, "close to St. Pat's" is religion-specific, "quiet street" may imply age preference. You can typically use the actual name of the neighborhood (hm, unless someone has just 'rebranded' a neighborhood name, in which case you might want to leave it out or use both the old & new names).