Geo tech report shows soft/loose soil at between 6-12 deep. The engineer originally thought we were doing a basement but no longer are. We're building 15 2 story townhomes on frost protected shallow foundations. The soil above 6' is very dense. The shallow foundation will only be a couple feet deep. Based on your experience (I know you probably aren't engineers) do you think we'll still have to dig out the bad soil at 6-12' eventhough the foundation will only be 2' deep?

A proper soil test should answer that. Note that with a monolithic, thickened edge or waffle slab, the loading is pretty low.