You can write them a letter and discuss the possibility of a refund -- mentioning that you may take them to small claims court to deal with their failure to refund your dollars. The problem you will most likely encounter is that you paid an "application fee" -- which presumably has nothing to do with whether or not you rent the place.
In no way am I offering you legal advice, and in no way has my comment created an attorney-client relationship. You are not to rely upon my note above in any way, but insted need to sit down with counsel and share all relevant facts before receiving fully-informed legal advice. If you want to be completely sure of your rights, you must sit down with an experienced criminal defense attorney to be fully aware of your rights.