When making a choice to acquire a property, there are myriad explicit and implicit considerations that must be taken into account.  

Or does this violate the arms length restriction?

I've seen rates on those (they're generally ARM's) go as low as 6.49%(if you buy it down) for no income verification products; even lower for full doc.  

My bank is offering me 100% financing on a 5/1 ARM at 3.55%, which is a whole other discussion on whether i should use that financing.

@Ben PiperNo income verification rates for properties (1-4, non warrantable condo's etc...) are running in the mid 7's on 3 year ARMs with anywhere from 2-4 points depending on loan size.

Currently my bank has 6/1 arms starting at 4.5% for the first 6 years and capped at 6.2% in year 7 and beyond.

Being a hard money lender to another (un-related) investor who flips houses and simply collecting interest on a loan is a good way to keep things arm's length and eliminate UBIT exposure.There are a lot of positive ways you can put IRA money to work in real estate and a lot of good threads on the topic here on BP.  

Does most investment loans require an ARMS Loan?

If I own a store, I can stipulate that you don't have a freedom of speech, right to bear arms, and that I may search you entering, etc. 

However...You may be able to get a commercial mortgage, which take a lot longer to close and are typically ARMs at higher interest rates.You can get a residential 30YF & violate the ubiquitous "due on sale" clause by transferring title over to the LLC after closing (title search will still show your personal name).