Optimist.....So sorry to learn of your difficult dilemma. My first question is 'how serious are your son's mental issues?' Is he struggling alone without any counseling or professional help? Does he alienate others because he's confrontational? How confrontational is he? Belligerent, aggressive, angry, or violent? Worst of all....Could he ever pose a danger to himself or others?
In your situation, I would take much of the advice given here. Exhaust every resource available to get your son the help he needs. For the moment, he needs professional help and a safe place to live, preferably not your's.
A move back home should be a last resort, to be considered only when all other options have been exhausted. If it does come to that, he should be under the constant care of a mental health professional while he is living under your roof.
The goal should be for him to regain his mental stability; so he can hold a steady job, be independent and ultimately move to his own place when the time comes.
I so hope things work out for the best.
Hugs, Willa