At 3 he's a bit young. I'm all for sleepovers and my oldest has been doing them since age 4, but 3 is still baby-ish enough for there to be lots of problems, scared to be away from home, etc. Now if he's just going to spend the night at grandma's -that's different -but going to a friend's house or having another 3 year old friend over -that could really be trouble! I would tell him to wait until next year and try it with a really good friend whose parents you know.
Right now -tell him you're going to have a fun sleepover and put down blankets or sleeping bags in the living room floor, watch fun movies, eat popcorn and sleep there. Build a fort. Pitch a tent if you have one. He'll probably have a great time having a sleepover with mom (or mom and dad)!