In this case S8 is probably not a good option.If you are convinced you can find a great family that will take care of your property, then either option is fine for you. 

Raleigh would’ve been a great option, but it’s not available for my relocation.

Everyone we have spoken to only considers short term rent as an option.

Staging your house well can help you attract more attention from buyers, which ultimately helps it sell faster and maybe for a higher price than an unstaged home (see visual):What Are My Staging Options?

With some of the new properties they find they are getting great interest rate buydowns from builders. with equity of 1.2M you have many options on where to move. 

There are so many other options!

We also had the option of another type of policy that was even less expensive that would have required us to spend at least 1 night in the house and rent it at least 30 nights each year.

The house will need a new fence soon, so I'll have to factor that into the scenario.I'm not sure which choice is the best option for me.

I would focus on improving your credit and obtaining a more stable income so that conventional financing is an option. 

Kyle there are a ton of options here that you can compare.