My DS1 was about the same age as yours when I had my homebirth, and my biggest worry about it beforehand was how he would cope with it. I had hoped for it to happen like Katemum's labour (overnight, DS1 wakes up to find new brother or sister) but it didn't work out that way.
I laboured at home during the day, and in the afternoon had a long bath which got things moving (DS1 got in with me, squirted me with a water pistol and was generally quite oblivious to me having contractions). I made the mistake of waiting too long to call the midwife though, as I'd wanted DS1 to be in bed before they arrived.
DS2 made his appearance into the world whilst I was on my own in the lounge as DH was busy fetching towels, entertaining DS1 and shouting down the phone to the hospital trying to summon up some help. DS1 came into the room literally seconds after DS2 was born, to find me sat on the floor in a puddle of water and blood, holding his new brother and he was totally and utterly unfazed by the whole thing. The only time he looked slightly alarmed was when I had a big contraction in front of him and made a funny noise (no screaming, just a moan).
It was actually lovely to have him around during the whole thing, he didn't seem to feel excluded at all, just enjoyed the excitement of the day - we had several midwives turn up, plus a friend, all of whom gave him loads of attention, and he got to stay up way past his bedtime too.
It might just be worth having a friend on standby just in case you need to go into the hospital for any reason (I nearly had to go to be stitched up but in the end the hospital sent a nurse over to do it at home).
All the very best of luck with everything! I'm sure it will be fine, try not to stress too much about the toddler. DS1 actually has no memory at all of it now, I've asked him a couple of times and he can't remember anything so it definitely didn't freak him out.