Oh Treese, I am sorry. You are hurting so much. For now do not make any decisions. Let your mind take in what he said and is happening, then when you are calmer go get advice.
You have been separated for some time now have you already seen a lawyer just to see how things stand.
I have no knowledge of US laws they seem different state to state.
The paternity is your h concern try not to worry about it too much. After all this all happened 8 years ago so all your worrying will not undo it.
I know it hurts and like me you were together a v long time. I have no idea why theses things happen but they do so take care of you and your children for now thats all you can do.
Worry about the financials and the house after you get the information.
I lost my family home and hated it but I got a smaller house and I am quite settled now. It does get easier.