Aside from Slava's concerns, sounds like it's getting close to mortgage fraud, no? I imagine if your friend is being above-board with the lender about what he's doing and they still decide to lend him the money then that's their prerogative. Go for it, I suppose. But if there are shenanigans afoot with respect to the mortgage application (ie your friend says he will be using it as his primary residence, not renting it out, etc.) then it may be a bit fishy.
For example,
seems close to this:
Occupancy fraud: This occurs where the borrower wishes to obtain a mortgage to acquire an investment property, but states on the loan application that the borrower will occupy the property as the primary residence or as a second home. If undetected, the borrower typically obtains a lower interest rate than was warranted. Because lenders typically charge a higher interest rate for non-owner-occupied properties, which historically have higher delinqency rates, the lender receives insufficient return on capital and is over-exposed to loss relative to what was expected in the transaction. It is considered fraud because the borrower has materially misprepresented the risk to the lender in order to obtain more favorable loan terms.