M.P.
Just tell him there are all kinds of dads in the world. Some that live with the moms and kids, some that live apart from the moms and kids, some are around a lot (like grandpa) and some aren't. Like a lot of boys and girls, he just happens to have a father that isn't around and there is nothing wrong with that. Tell him that you are a very, very special and lucky mom in that you get to be both mom and dad for now.
Make it as positive as you can without degrading his father. One day he may see the light and want to be a part of his life. If not, he has you- the greatest mom in the world!