Some cottage areas or municipalities have by laws or restrictive covenants in place that will prevent you from operating the unit as a STR.  

Here is a brief description of it:https://malegislature.gov/Bills/191/HD5166Protecting Renters and Preventing Evictions-Cancel/ban evictions for rent due from the start of the COVID-19 State of Emergency through 12 months following the end of the State of Emergency, if tenant was unable to pay because of a direct or indirect impact of COVID-19.

Is there a fair housing law that prevents me from stating that I would not rent to tenants from section 8?

There might be some language that prevents you from doing what you propose.This is a good idea to add value to your company.In any case, please post when you have an update.

Well approximately 15 years into our firm, we implemented additional systems. 

@Ramon Vargas if you are planning to implement a buy and hold strategy then a cash-out refi is preferable since it provides longterm fixed rate loan.

It also prevents unethical sellers from saying they applied the security deposit to past due rent back in 2008.

Do your semi annual inspections, enforce the lease and you can prevent being in this predicament.

Any advice on how to best handle a situation in which tenets don't pay citing the law or for screening future tenets to prevent this?  

If I need the permit, will that prevent the tenants from moving in next week ?