Nothing wrong with using the tunes of folk songs for hymns. And nothing wrong when it happens the other way round.

A lot of the time noone is sure which came first, because either way the tunes get recycled, so that a folk song tune becomes a hymn tune, which is used for a song and then another hymn gets written using that tune...What matters is that the songs and hymns you end up with are good songs and hymns.

And if that means adjusting the tune a bit, that's part of the folk process anyway.