My friend and her husband bought a home with another friend. The friend contributed a small amount for the down payment and has been paying rent but is listed as an equal co-owner on the deed. The friend and husband got a mortgage (in their names only) and are paying that. When they go to sell the house, is the friend entitled to a third of the sale price, or just what’s left over after the mortgage has been repaid.
Your friend and her husband should urgently consult a lawyer. Worst case they are fully responsible for the mortgage while owning only half of the house. I really, really hope that you or they misunderstood something.
"listed as an equal co-owner" means just that. Heck, he might own half if your friend+husband are considered a single unit. After all, they are only paying the mortgage because the other friend is paying the rent.
Did your two friends have a contract specifying ownership percentage?
If everyone is an equal co-owner of the house, they are all entitled to an equal share of the sale proceeds, unless they have some other agreement/contract in place.
The friend and husband got a mortgage (in their names only)
So they took on some debt, using (hopefully only their portion of) the house as collateral. This has nothing to do with who owns the house.
is the friend entitled to a third of the sale price, or just what's left over after the mortgage has been repaid?
This is a bit backwards - your friend and her husband have an obligation to pay the mortgage, and are responsible for coming up with whatever may still be owed beyond what can be paid off with their share of the sale proceeds (as opposed to selling the house and using all the proceeds, including the other friend's portion, to pay of their debt and dividing up what is left).