RESIDENTIAL ACCREDIT LOANS, INC.
Company
RESIDENTIAL FUNDING CORPORATION
Master Servicer
Mortgage Asset-Backed Pass-Through Certificates
Series 1997-QS12
$4,471,500 7.250% Class M-3 Certificates
Supplement dated December 4, 1997
to
Prospectus Supplement dated November 24, 1997
and
Prospectus dated September 23, 1997
The Class M-3 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 December 4,1998 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 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
(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
<PAGE>
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 Class M Certificates may be deemed to be underwriters and
any profit on the resale of the Class M 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 4, 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.
<PAGE>
