@Eric JamesYes, when an IRA uses leverage, there are higher down payment requirements and the income to the IRA is subject to a small tax known as UDFI (Unrelated Debt-Financed Income).As such, using a mortgage in an IRA is different than using a mortgage personally, but that is not really the point.The thing to keep in mind when evaluating an investment with an IRA is how something such as purchasing an income property for the IRA using a mortgage might compare with investing the IRA in a property all cash, investing the IRA in a note, or investing the IRA in conventional financial products.The use of leverage such as a mortgage can boost the cash-on-cash return of the IRA, which is a good thing.  

HOA debts are the wild card though, that a title search won't necessarily help with.

However, if the place is operating as a rooming house - legal or not - when the appraiser reports back that there are 6 bedrooms (each with their own locks) and separate leases for each of the tenants, the lender will run away.Additionally, what @Ned Carey indicated about debt service not being included in NOI holds the same as practiced by investors in Canada.  

As your buying rental and your debt ration is your current Piti and what negative rental from the property your buying after calculation of thr piti & 25% for operating expense from 75% of potential income. 

If the loan is set up amortize for the 30 year on 500k then the refi, debt service is only going to be approx 2k monthly.

The law does not outline such specifics and there is little case law to rely on.We would definitely not recommend that you JV with your IRA while obtaining debt-financing personally.  

He can look into a 1st MTG settlement, but just know, they are a rare work out option. 

If you have and are sure you are still underwater, continue to monitor and pay down debt so when the day comes that you can get out from under it, you are ready to take advantage of the opportunity.

All depends on Your Global Debt to Income.

Turns out it is has "settlement issues" which I learned is code for sinkhole.