All my daughter wants for her birthday is for her cousin to come sleep over

My daughter is turning 12 and having a sleepover party. She REALLY wants my niece to come to the sleepover because they never get a dance to have sleepovers since my sister and niece currently live with our mom and there isn't much room. My sister has said no to my niece staying the night because of my husband.

It's not something my husband specifically did. My sister was sexually abused as a child. My husband has lived a pretty traumatic life which I won't talk details because it's irrelevant but my sister wants to protect her daughter and she believes that most men who are abused will become abusers and she doesn't want my husband repeating the cycle on her daughter. I understand my sister has trauma. I'm married to a man with trauma so I get it but my daughter is believing it's her dad's fault and asked could he stay somewhere else for her party because my sister has told my daughter the exact words I don't want your dad molesting my daughter. She didn't even know what molestation was.

I was upset about that because she can do what she wants but don't put in my daughters head that her dad is a creep. But anyway, my sister did say her daughter could come if he's not there. I don't think it's fair to tell my husband to leave his own house because my sister wants him to. My daughter is saying this is all she wants for her birthday. There doesn't seem to be much compromise.

Edit: My husband wouldn't have anywhere to go for the night unless he wanted to sleep in his car which I know he wouldn't because he has severe back problems from injury. He doesn't have family. He has nowhere TO go. Also it's not a "need". It's a want. My niece isn't scared of my husband. My sister is the one who is scared which I understand my sister has trauma. My husband does to. That doesn't mean I have to cater to whatever she wants and put my husband in an uncomfortable situation because she WANTS him not to be there.

Edit2: I don't have money for a hotel or I would have done that instead. We had to buy a new car recently because our transmission went out and it took a lot of money. We have like $200 in our bank account until we get paid again which will mostly go to gas to get to work.

Edit 3: I could possibly talk to my mom about letting the girl have a party there. I don't think she would because my mom hates sleepovers and has been trying to get my sister to find a place and move out. But I could at least try. Worst she can say is m