If we had a loan (turned down) that was for the purpose of purchasing 7 single family homes and one duplex, how would we report this?

Your choice - you could pick one property and report the whole loan amount or allocate the loan amount for each dwelling and report as 8 applications. See page D-12 in the 2004 GIR.

As a denial.

Oh, you mean how you report the properties? You choose one of the properties and report the information on it, or report all 8 properties with unique identifiers and allocate the loan amount among them. The easiest is to report one property.