RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.
Company
RESIDENTIAL FUNDING CORPORATION
Master Servicer
Mortgage Pass-Through Certificates
Series 1997-S21
$998,900 6.50% Class M-1 Certificates
$665,700 6.50% Class M-2 Certificates
$399,400 6.50% Class M-3 Certificates
Supplement dated December 24, 1997
to
Prospectus Supplement dated December 22, 1997
and
Prospectus dated December 22, 1997
The Class M-1 Certificates, Class M-2 Certificates and the Class M-3
Certificates (collectively, the "Class M Certificates") will be offered by
Residential Funding Securities Corporation (the " Class M Underwriter"), on a
best-efforts basis pursuant to an Underwriting Agreement (the "Class M
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 December 24, 1998 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
(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
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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.
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 MARCH 24, 1998 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.
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