There are risks -- how serious they are depend upon the facts, and whether the friend intends to abuse the your hospitality.

If the person never sets foot in the home it is unlikely that they would be able to convince the police or a court that they have a tenancy, but if they put the homeowner's address on all of their ID, they may give it a try. If the person uses the address to commit fraud, such as welfare fraud, the homeowner may come under investigation. If the person claims that mail was lost or stolen by the homeowner, the person may try to make a legal claim or even file a police report. If contraband arrives at the home by mail, the police may believe that the homeowner was the intended recipient.

If all a person needs is a mailing address, it's easy enough to rent a post office box. I would personally make the gift of a six month or full year post office box rental, at $10 - $15 per month, than let somebody who didn't live in my home use it as a mail drop.