I would like to change the status to Waiting List, but the only options are Inactive/on Hold or Exited.
You will just need to exit the family first. If you go straight from Active to Wait List (or Mailing Only), this will cause reports to be incorrect. You need to show that services ended, and then they can be placed on Wait List.
Create a New Status of Exited with the exit date and reason.
Go back to the family and Create a New Status of Wait List (Mailing Only).