I think your friend may be out of luck. My read on this is the loan has to be in place before December 15, 2017, and a loan is not considered outstanding until escrow closes.
The good news is the change in the law is not as bad as it could have been. The original House bill proposed a loan limit of $500k whereas the Senate bill left the limit at $1MM. The compromise was $750k.
At the end of the day, assuming the interest on $250k of your friend's loan is no longer deductible, based on a 4% interest rate, your friend would lose $10k of deductions. Assuming a 40% marginal tax rate, your friend loses out on $4k annually, roughly $300/month. Definitely a little more than pocket change, but probably not enough to dissuade someone who is buying a property valued at $1.25MM+. Assuming the purchase price is $1.25MM and the buyer is putting down at least 20% and taking a loan of 80% ($1MM), the monthly principal and interest payment would be roughly $4,800 on a 30 year mortgage at 4%. That doesn't include property taxes, insurance, HOA, etc. Including those items, let's assume the monthly payment is $6,000. The $300/mo difference is 5%, probably not enough to sway your friend if they love the house already.
And if your friend is in the enviable position of buying a property much more that $1.25MM, then the $300/mo is an even smaller part of their world.
