Perhaps if you said that you and dad had a disagreement on something and it upset you very much and that daddy is upset too. That it is a grown up disagreement and nothing to do with them and you will both always love them no matter what.
Then go with something like... that because you are both angry and sad with each other it makes you both cross and say unkind things about each other (like when dad said you had kicked him out that was an unkind thing to say but dad was angry and that's why he said it). Explain that it is different when grown ups get upset like this and that there is nothing they can do that would ever stop you loving them.
Explain that you (parents) don't want to make each other unhappy and sad any more so you have decided to live in different houses so you can both take care of them without being sad and grumpy about the disagreement you had. That dad will come to see them at your new house and that they will go and stay with dad sometimes too.
Then ask if he has any questions or anything he wants to talk about. And if (as its quite likely) he says no (or if it involves something unrelated like can he go watch tv!) then ensure he knows that if he does think of anything he can ask you at any time.
It is likely he will come and ask you something at some point.
There is honest and there is honest without needing to involve your dc in things that they shouldn't be privy to at their age which may affect their relationship with you both. When he is older your ds1 will see things more as they really are, but for now he need sto feel safe and secure in you both with all the changes that are going on in his life.
So much as you'd like to ensure that he knows you are the injured party, it's just not worth the fall out the whole truth will have at this point.