Since you say he is still 100% mentally, then have a heart to heart with him explaining your concerns and possible options. Be very specific about what level of safety net you're willing to provide for him so he has to consider that as well. Once he decides, respect his wishes.

This response comes from 12 years of working with mentally ill homeless people and having to respond to the constant queries "why doesn't someone DO something about this homeless guy??", well the gold standard in MH applies...if they are not at risk of harming themselves or others, then you can't make an adult DO anything.

Major kudos to you for caring about your friend.