Owner Finance = Debt in SD IRA?

[Will Fraser]

I understand the general concept of UDFI in a SD IRA and I've searched some boards to see if this has been discussed, but alas here we are.

If Mr. X approached seller Y about Property and seller Y said "I'll sell you this and finance it.  You bring $10k and I'll owner finance the rest."  Seller Y is very flexible in structuring and trusts Mr. X. 

Is this a situation that could lead to Mr. X's Self Directed IRA account owning the property and NOT owing UDFI?