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Hi RJMonski,

There are several possible reasons for the not-approved designation, but for residential sales it usually boils down to meaning that one cannot get a FHA loan for the property.

It could be because the property does not (or would not) pass a FHA inspection, or the development did not receive HUD approval (maybe the developers didn't want the hassle, but that's unikely for a "normal" townhome development).

At any rate, you want to make sure a thorough inspection is done. If you ask, the seller or seller's agent may be able to give you the specific reason for the disclaimer.

Hope this helps.

Fool on,

TMF DaddyO
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