My account has told me the same from an IRA viewpoint --- don't blur the line (legal wise or IRS wise).If it's business, operate it as such.

The income limitation only applies to Roth IRAs.

I am looking for some advice from SD IRA and HUD/FHA Multifamily financing experts here.

I checked the BP company search, but there is no 401K / IRA category, so I'll just ask...Who do you use for your self-directed IRA? 

Account ClosedThere should be no issues with using SDIRA funds for such transactions.Interest income is passive in nature and therefore not subject to UBIT - which applied when a tax-exempt entity engages in a trade or business on a regular basis.UDFI applies when an IRA uses debt-financing, such as the IRA obtaining a mortgage to purchase a rental home.

I have around 200k in an IRA that's strictly for retirement purposes, 100k in a CD, around 70k that is in savings but will probably be eventually used to pay off a piece of equipment.

It doesn't seem to be worth the effort pay 15% in order to save 20% (I won't have any business expenses), and have the risk of IRA reclassifying this income.

A lot of forum members are very knowledgeable in their respective fields related to real estate investing, whether that is real estate sales, wholesaling, flipping, rentals, lending, self-directed IRA and Solo 401k investing, or tax and legal guidance.Discounts on some products and services are offered to BP members: https://www.biggerpockets.com/perks/proIf you haven’t been to it already, you might want to check out the BP blog: https://www.biggerpockets.com/blog/The site has quite a few tools that can be helpful for new members.

Is there a local or otherwise non-local IRA provider that you recommend?

A great starter book about debt market is by Jim Napier called "Invest In Debt".I also wrote a book (about building income using Self Directed IRA and Solo 401k) but no self promotion..lol