Can I safely deny a family with kids?

[Johann Jells]

I have a family of 4 wanting to look at a 650 ft 3rd floor unit with two 7"x10" bedrooms. I think it's too small for 4 and I don't want to burden the 2nd floor tenant with the noise. Do I have a risk just telling them I don't rent that unit to more than 3 people, or should I fib in some way like telling them it's taken? They're Latino,  that really has nothing to do with it, but I just don't want to expose myself to a potential hassle.