That's messed up taking loans for someone else in your name. anyways not commenting on personal choices.
I don't know whether it will fly or not because he was supposed to have funds when he created the application. Without knowing full picture it is difficult to say. I'm just saying depends on what kind of loans he has. Given that you are saying the loans for business needs, most likely they will be deducted from his POF account. They may have not done that with a housing loan. All he can do now is to make sure his current funds are greater than minimum funds needed after deducting loan amount. And if he is adding funds in these days and it is a big amount it has to be done using a gift deed.