RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.
Company
RESIDENTIAL FUNDING CORPORATION
Master Servicer
Mortgage Pass-Through Certificates
Series 1997-S5
$ 10,026,600.00 7.50% Class M-1 Certificates
$ 5,013,300.00 7.50% Class M-2 Certificates
$ 5,013,300.00 7.50% Class M-3 Certificates
Supplement dated April 23, 1997
to
Prospectus Supplement dated April 21, 1997
and
Prospectus dated June 21, 1996
The Class M-1 Certificates will be offered by Residential Funding
Securities Corporation (the "Class M-1 Underwriter"), on a best-efforts basis
pursuant to an Underwriting Agreement (the "Class M-1 Underwriting Agreement")
among the Company, the Master Servicer and the Class M-1 Underwriter. The Class
M-1 Underwriter is an indirect wholly-owned subsidiary of the parent of the
Company. The obligation of the Class M-1 Underwriter to pay for and accept
delivery of any of the Class M-1 Certificates is subject to, among other things,
the simultaneous sale by the Underwriter of such Class M-1 Certificates. The
termination date of the offering of the Class M-1 Certificates is the earlier to
occur of April 23, 1998 or the date on which all of the Class M-1 Certificates
have been sold. Proceeds of the offering of the Class M-1 Certificates will not
be placed in any escrow, trust or similar arrangement. The Class M-1 Underwriter
intends to offer the Class M-1 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-1
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 Class M-1 Underwriter may effect such
transactions by selling the Class M-1 Certificates to or through dealers. In
connection with the purchase and sale of the Class M-1 Certificates, the
Underwriter and any dealers that may
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 Morgan Stanley & Co.
Incorporated
<PAGE>
participate with the Class M-1 Underwriter in such resale of the Class M-1
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
Class M-1 Underwriter and any dealers that participate with the Class M-1
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 Class M-1 Underwriting Agreement provides that the Company will
indemnify the Class M-1Underwriter 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-1 Certificates.
Neither the Company, the Class M-1 Underwriter nor any other person intends to
make a secondary market in the Class M-1 Certificates. There can be no assurance
that any such secondary market will develop, or if it does develop, that it will
continue.
The Class M-2 Certificates and the Class M-3 Certificates will be
purchased from the Company by Morgan Stanley & Co. Incorporated (the "Class M-2
and Class M-3 Underwriter"), pursuant to an agreement (the "Class M-2 and Class
M-3 Underwriting Agreement") among the Company, the Master Servicer and the
Class M-2 and Class M-3 Underwriter. The proceeds to the Company from the sale
of the Class M-2 and the Class M-3 Certificates will be equal to $9,643,552.55,
net of any expenses payable by the Company.
The Class M-2 and the Class M-3 Underwriter intends to offer the Class M-2 and
Class M-3 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 Class M-2 and Class M-3 Underwriter may effect such transactions by
selling the Class M-2 and Class M-3 Certificates to or through dealers. In
connection with the purchase and sale of the Class M-2 and Class M-3
Certificates, the Class M-2 and Class M-3 Underwriter and any dealers that may
participate with the Class M-2 and the Class M-3 Underwriter in such resale of
the Class M-2 and the Class M-3 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 Class M-2 and the Class M-3
Underwriter in the form of discounts, concessions or commissions. The Class M-2
and Class M-3 Underwriting Agreement provides that the Company will indemnify
the Class M-2 and the Class M-3 Underwriter against certain civil liabilities
under the Securities Act of 1933, as amended, or contribute to payments required
to be made in respect thereof. There is currently no secondary market for the
Class M-2 and the Class M-3 Certificates. There can be no assurance that an
active secondary market will develop, or if it does develop, that it will
continue.
UNTIL JULY 22, 1997, 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.
<PAGE>
