The reason is because the short sale must be an arm’s length transaction.

IRS does not allow any transaction between IRA and disqualified person, all transactions must be “arms length”.If you decide to use leverage in your IRA the loan must be non-recourse, you are not allowed to use conventional financing because it requires personal guarantee.

As @Tarik Turner said, there are plenty of long term fixed and ARM options before you have to consider a balloon option. 

Armed with this make your way to the owner and present a well-written offer without any contingencies.Packaged correctly the owner of the property may want to proceed with you.  

Also, if I transfer my Colorado rental's VA loan to, for instance, a non-VA 7/1 ARM, would that open my entitlements back up and give me the ability to use my VA Loan in the future?

Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.3.

@Ian Cosley- I am filled with admiration for your father for not allowing his missing arm to get in his way to success :)Account Closed- So true!

All transactions involving IRA must be "arms length".

Im thinking menards or home depot because specialty sign companies cost an arm and a leg.Thanks  in advance everyone!

Keep it arm's length, friendly, and professional.