I'd had to fix this a couple of times now on various computers and figured I'd just post the answer in case I ever have to do it again.
By default the numeric keypad sends function key codes. You can turn that off by selecting the "xterm with numeric keypad" preset in Preferences > Profiles > Keys.For those of you who don't use iTerm2, I highly recommend it. One of my favorite features is enabling semi-opaque transparency and blur so I can still code and not be distracted the background artifacts. The settings can be found in Preferences > Profiles > Window
And these settings end up looking like this