Well, there is nothing wrong with an FHA loan if you lack funds for a 20% down payment. The PMI is generally lower, but stays for the life of the loan. If he has great credit, he can do better elsewhere, but, and I'm just stereotyping here, he does not seem like someone with an 800 FICO score, so the FHA might be the best rate/PMI payment he can get. FHA is best for people with questionable credit or couples just starting out without a big cash stash, etc, etc, etc...
For him, more important that the specific loan he is getting would be is the house affordable, is it reasonable given the size/potential size of his family, is it close to a bunch of employers in his/her field, etc...
That and does he have a long term financial plan.
Basically, yeah this might not be the most optimal loan he can get, but the loan itself is hardly an egregious waste of money that can never be fixed. However, if he is buying a 2500 sqft home and never plans on having children, etc.. Then go facepunch him.