Fannie Mae Redemption

WASHINGTON, September 28 /PRNewswire/ --

Fannie Mae (NYSE: FNM) will redeem the principal amounts indicated for
the following securities issues on the redemption dates indicated below at a
redemption price equal to 100 percent of the principal amounts redeemed, plus
accrued interest thereon to the date of redemption:

Principal    Security  Interest    Maturity     CUSIP     Redemption 
      Amount       Type       Rate       Date                     Date 
   US$250,000,000  MTN       5.300 %   October 10,  3136F73A3  October 10,
                                         2008                     2007
    US$50,000,000  MTN       5.250 %    April 10,   3136F7XJ1  October 10,
                                         2008                     2007
    US$50,000,000  MTN       5.500 %    July 12,    3136F8QB4  October 12, 
                                         2010                     2007



Fannie Mae is a shareholder-owned company with a public mission. We exist
to expand affordable housing and bring global capital to local communities in
order to serve the U.S. housing market. Fannie Mae has a federal charter and
operates in America's secondary mortgage market to ensure that mortgage
bankers and other lenders have enough funds to lend to home buyers at low
rates. Our job is to help those who house America.

This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities of Fannie Mae. Nothing in this
press release constitutes advice on the merits of buying or selling a
particular investment. Any investment decision as to any purchase of
securities referred to herein must be made solely on the basis of information
contained in Fannie Mae's applicable Offering Circular, and that no reliance
may be placed on the completeness or accuracy of the information contained in
this press release.

You should not deal in securities unless you understand their nature and
the extent of your exposure to risk. You should be satisfied that they are
suitable for you in the light of your circumstances and financial position.
If you are in any doubt you should consult an appropriately qualified
financial advisor.

Web site: http://www.fanniemae.com