RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.
Company
RESIDENTIAL FUNDING CORPORATION
Master Servicer
Mortgage Pass-Through Certificates
Series 1996-S17
$1,515,800.00 7.25% Class M-1 Certificates
$ 606,400.00 7.25% Class M-2 Certificates
Supplement dated July 26, 1996
to
Prospectus Supplement dated July 23, 1996
to
Prospectus dated June 21, 1996
The Class M-1 and Class M-2 Certificates (together the Class M
Certificates) will be offered by Residential Funding Securities
Corporation (the "Underwriter"), on a best-efforts basis pursuant
to an Underwriting Agreement (the "Underwriting Agreement") among
the Company, the Master Servicer and the Underwriter. The
Underwriter is an indirect wholly-owned subsidiary of the parent
of the Company. The obligation of the Underwriter to pay for and
accept delivery of any of the Class M Certificates is subject to,
among other things, the simultaneous sale by the Underwriter of
such Class M Certificates. The termination date of the offering
of the Class M Certificates is the earlier to occur of July 26,
1997 or the date on which all of the Class M Certificates have
been sold. Proceeds of the offering of the Class M Certificates
will not be placed in any escrow, trust or similar arrangement.
The Underwriter intends to offer the Class M Certificates from
time to time to the public in negotiated transactions or
otherwise at varying prices to be determined at the time of sale.
The proceeds to the Company from
any sale of the Class M Certificates will be equal to the
purchase price paid by the purchaser thereof, net of any expenses
payable by the Company and any compensation payable to the
Underwriter and any dealer. The Underwriter may effect such
transactions by selling the Class M Certificates to or through
dealers. In connection with the purchase and sale of the Class M
Certificates, the Underwriter and any dealers that may
participate with the Underwriter in such resale
of the Class M Certificates may be deemed to have received
compensation from the Company in the form of discounts or
commissions or, in the case of such dealers, compensation from
the Underwriter in the form of discounts, concessions or
commissions. The Underwriter and any dealers that participate
with the Underwriter in the distribution of the Underwritten
Certificates may be deemed to be underwriters and any profit on
the resale of the Underwritten Certificates positioned by them
may be deemed to be underwriting discounts and commissions under
the Securities Act of 1933.
(continued on the following page)
THIS SUPPLEMENT MUST BE DELIVERED TOGETHER WITH THE PROSPECTUS
AND PROSPECTUS SUPPLEMENT REFERRED TO ABOVE, AND SHOULD BE READ
IN CONJUNCTION THEREWITH.
Residential Funding Securities Corporation
The Underwriting Agreement provides that the Company will
indemnify the Underwriter against certain civil liabilities under
the Securities Act of 1933, or contribute to payments required to
be made in respect thereof. There is currently no secondary
market for the Class M Certificates. Neither the Company, the
Underwriter nor any other person intends to make a secondary
market in the Class M Certificates. There can be no assurance
that any such secondary market will develop, or if it does
develop, that it will continue.
UNTIL OCTOBER 24, 1996, ALL DEALERS EFFECTING TRANSACTIONS IN THE
CLASS M CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS (INCLUDING
THE PROSPECTUS SUPPLEMENT AND THIS SUPPLEMENT). THIS DELIVERY
REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT
TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
