I honestly think she should haven been confronted, albeit under a much cooler temperament. Love doesn't mean you have to be a passive coward. Sticking your head in the sand accomplishes nothing especially for the man that needs to reestablish boundaries. Often time we are our own worst enemies with some of the monster we create. You told her what you had to say, now back ALL the way off. Give her relationship with him no more attention. If you can afford your place alone I this asking her to leave is actually a great idea. If he's willing to remodel a house whatever that means then i'm sure he can welcome her now. Some might not agree with this but its just my opinion. Eat the meat and throw away the bone. Focus on you and your child and let God handle the rest.
