What is the market rate for a fee for agreeing to co-sign?

[Mike Akerly]

I'm evaluating an opportunity to participate in a small development project by co-signing on a construction loan.  The construction loan proceeds will be used to take out the existing debt on the land and to build the project, which should take 6 months.  I'm not asking for advice on evaluating the project, but rather, does anyone have experience that would indicate what the market is for participating in this way?  

If it's a flat fee, how much?  If it's a percentage of the deal, how much?  The intent of the developer is to hold the second phase for rental, so I can decide now if I'd prefer to participate via an ongoing interest or ask to be taken out with a refi after lease-up of the project.  I would have no other cash or performance obligations, but obviously remain at risk, along with the project sponsor, until the loan proceeds are paid off.  So, suggestions for terms for either or both of these options would be appreciated.  A few facts:

• the loan is in the $850k range, 1 year interest only.  I am not obligated to contribute to the debt service
• I won't be an active participant in the development process
• At the end of the 1 year term we can extend for a fee, refi, or pay off the loan.  I guess that's probably obvious.
• This is the second phase of the project, so there is some proof of concept in pricing, demand, absorption, etc. as well as some lessons learned in the construction that should improve efficiencies (essentially building more of the same plans).
• The developer is 20 year friend.  We both have our respective real estate businesses focused on different aspects of the business.  The basic reason he needs a guarantor is that he made $20k in 2017 while he moved his family and business to a new state and a project was delayed resulting in $170k in income pushing from '17 to January of '18.  Then he had $300k in income in '18.  The co-signer request is coming from the lender and the developer feels like it would also be asked for by other lenders, the terms on this one are good, and there's no point in starting over on the loan only to end up with the same result but a different bank (and possibly less desirable terms).

Again, I don't have a strong sense of what I should ask for in return for playing this role if I decide to move forward and how my participation might be structured.   Any thoughts would be greatly appreciated.