Never a good idea to use the production storage as the backup repository. If you lose your iSCSI SAN you lost your backups too. You'll also probably find that Veeam restores, especially vPower jobs like Instant Recovery and Surebackup, will generate additional I/O that could impact you production VMs (depends on # of spindles, arrays, etc on your SAN)
Go to the Veeam Backup and Replication Resources page
to get the Eval Guide for Hyper-V
Just on the surface and without fully knowing your infrastructure, I would investigate repurposing an old physical server as a Veeam server. Find one with 6 or 8 local hard drives and use that storage as the backup target (repository). This will give you local performance without impact to your prod VMs and peace of mind if something very bad happens. Getting a copy of the backups to the remote site could be done a couple of ways with or without Veeam. A Veeam job would work best usng our distributed architecture, for example, but hopefully the Eval Guide will help you understand your options better.