Interest is computed on the outstanding balance.

The mortgage balance is irrelevant to your friend.  

Credit score, LTV, how many rentals you have, what balance of rate/closing costs you want, etc. all have impact.Just ballparking, you should be able to get a lower interest rate. 

I negotiate with the lender a discounted price for the remaining balance of the loan,once that figure is agreed upon, sell the property to the new buyer.

@Joe Rinderknecht  If your remaining balance is 160k, and the appraisal came in at 210k, your LTV is over 76%.

or are you referring to the UPB being 50% of original balance?

"Left over" money gets applied to lower your mtg balance.  

There are many benefits to using this loan and we will list those below- however please keep in mind that a licensed mortgage originator in your state should do a full analysis to see which renovation product is right for you and your family.Here are some highlights of the Fannie Mae Homestyle Renovation Mortgage: Perform almost any type of improvement or repair including luxury itemsImprovements and repairs can go up to 50% of the after improved valuePrimary residences, second homes and investment propertiesOne- to four-unit homes, condominiums, and PUDS30 year fixed rate mortgagesAs little as 5% downNo mortgage insurance for loans with 20% equityReduced mortgage insurance for loans with less than 20% equity versus a 203kHigh balance loans depending on your countyAdditions and second levelsSwimming poolExterior spa or saunaBuilt in BBQ island and outdoor kitchenBuilt in outdoor fireplaceTennis courtsGeneratorand really anything else you can think of!

I have about 60k cash that I could put down, but how does a person get a loan for the remaining balance?  

You learn over the years how to weave your schedule into the fabric of your life and still maintain a sense of balance.