Section 8 applicant mentally unstable?

[Nina B.]

Recently have a 1 Bdrm apartment become vacant.  A gentleman (let's call him Bob) called me and asked me if I took section 8; after which he launched into speech of needing to run for mayor, getting involved with gun control, earning his 3rd degree and fighting for the whales.   I said I didn't know anything about it and I'd have to look into it. He then gave me his social workers phone number and his FB address as his resume.  Never had a chance to call the social worker.  The next morning the social worker called me!  Bob is indeed on section 8 and "yes" in the State of Oregon landlords cannot discriminate against a section 8 applicant.  This all happened yesterday.  This morning I looked up his FB account and I KNOW THIS GUY!!!  We live in a small town where I ran a market for several years and he was always in and out of the store ranting on about something for hours, sometimes wearing a dress, sometimes dressed as a rainbow or a native Indian (you just never knew).  Bob can be described as someone extremely intelligent but unable to keep his intelligence on topic. Bottom line is this, am I legally obligated to process this guys application?  If he qualifies am I legally obligated to rent to him?  I really get that good people need a chance for affordable housing (my daughter's husband died leaving her with three children and I couldn't get qualified her for section 8).  

Bottom line though is this; if an applicant goes through the application process, as landlords, are we legally bound to rent to someone who we know is mentally unstable?  If you meet this guy you have a feeling he could go postal at any moment and he would not be above pounding on my other tenants door at 3:00 am to tell them he had a message from Jesus!  Sorry, I think I'm ranting a bit.  My husband and I have worked our asses off for the little bit of a nest egg we have and now I feel like every time I have a vacancy I run the risk of someone destroying my property, or getting sued by that one person that works the system.  

Advice?