The concept of self dealing is when you personally get benefit from the IRA before the appropriate age and withdrawal criteria. The IRS would classify the transaction as a withdrawal and apply penalties with the tax due. Your IRA trustee should not allow it with you qualifying on the loan.
Now how you can proceed. Find another investor that will loan you the down payment for what ever deal you can make. Verify if the mortgage company is okay with his participation. If that investor has a note you can buy or a property you can loan on he may make you a deal. As long as the two deals are not tied together then you should be okay.
As long as you pay fair market rents and the place is managed by someone else you shouldn’t have a problem. You personally can’t qualify for a loan but if you can get owner financing you’re okay too.
My idea is to take the $30K and buy a 4-unit complex – let’s say I put 10% down on a $300K 4-plex. I’d then live in one of the units and rent the other three, and try to break even.
I wouldn’t pay any rent for my unit, and I should be able to qualify for a loan… for the other 90%.