Get an attorney. Don’t take advice from an internet blog when it comes to legal matters. You screwed up, you did discriminate. Consider it a lesson learned. Whenever you review lease applications you never EVER make any statements that discriminate in any manner. You never need to give anyone any reasons for your decisions other then, “I am considering other applicants, and if you are accepted I will let you know.”
Finally if you are renting out a 4 bedroom home 2 kids can do as much damage as 7. Adding significant upgrades to a rental property is not a good idea.
