Hey Fred, the interest is still deductible, so no worries there. As long as the rate is fixed and there is no prepayment penalty, (very small 1-2 years might be okay) I see nothing wrong with it.
Years ago when Denver housing was in the toilet, a friend of mine bought a condo for 25k. She paid for it with her AMEX card, as she had a high-interest CD (anyone remember those?) that was maturing the following month. There are all kinds of alternative financing methods out there. The classics are seller and family financing. Since they small scale/special circumstances, it's no wonder you don't hear about them, as they are private deals.
And no, yours is not a hard-money loan. Yours is a perk of being a credit-worthy citizen during a time of historically low interest rates. Some day you will tell your story and your listeners will be amazed that such a thing existed. Just like my friend's 25k "credit card condo" in Denver.
P.S. My sister bought a foreclosure a few years ago. They'd had their eye on it for some time, but were outbid. After almost a year of waiting, the first buyer dropped out, so the bank contacted my sister. Their smart Realtor found out why the previous deal had fallen through (The bank wouldn't lend because there were no appliances in the house), so my even smarter sister combed through Craigslist for appliances free for the hauling. They put them in place in the kitchen (Wink, wink, they just "happened" to have them in their truck when their Realtor showed them the house again.) and the bank signed off on their deal. They never even plugged in the appliances to see if they worked. A year later, they had gutted and rehabbed the entire house themselves and it is now a thing of beauty that they can comfortably afford. Hope this qualifies as "input".