I had an appraiser tell me (this was back in 2016) that her job was to justify the mutually agreed upon price between two parties in an arm's length transaction.  

Few things to be aware:All transactions involving your IRA must be "arms length" - meaning that no "disqualified person" can be involved in any way, directly or indirectly.

In your case, just as you described in your original post, you will receive indirect benefit from such loan, that is what makes such transaction prohibited.Just remember for the future: all transactions involving your IRA must be "arms length" - disqualified person can't be involved in such transaction in any capacity, directly or indirectly.

Took out a commercial loan 5 year ARM.

The easiest way to handle this is the same way you would if you went to the doctor because of a sore arm.When the Doctor asks what's wrong and you answer that it hurts when you raise your arm, what's the first thing the Doctor says to you?

Assuming you're in an ARM now?

@Mary Chen, yes, they need to treat their portion as investment however and be very arms length about it. 

If there is a current safety issue I would replace it immediately.

Normally, FHA requires the seller to fix things that pose "health and safety" concerns before the deal can close.

Man, the seller's agent did a strong arm there, didn't they?