Fannie Mae Adjusts Dividend Rate for its Preferred Stock Series O to 7.000 Percent; Announces Initial Dividend Rate of 5.9481 Percent for Preferred Stock Series P

WASHINGTON, September 28 /PRNewswire/ --

Fannie Mae (NYSE: FNM) today announced the next scheduled quarterly
dividend rate adjustment for its Variable Rate Non-Cumulative Preferred Stock
Series O. The new rate will be 7.000 percent per annum. Fannie Mae also
announced an initial dividend rate of 5.9481 percent for its Variable Rate
Non-Cumulative Preferred Stock Series P (CUSIP 313586 786), which priced on
September 25, 2007.

The new dividend rate for Series O will be in effect from and including
September 30, 2007 to but excluding December 31, 2007. In accordance with the
terms of the Series O Preferred Stock Certificate of Designation, the
dividend will continue to accrue at a per annum rate of 7.000 percent until
it is determined that the sum of the 10-year CMT rate plus 2.375 percent is
greater than 7.000 percent on the applicable quarterly determination date.
Fannie Mae will only announce additional dividend changes to Series O if the
quarterly dividend rate for the quarterly dividend period is greater than
7.000 percent.

Holders of record of Series O preferred shares will be entitled to
quarterly dividends when and if declared by the Board of Directors of Fannie
Mae. Fifty million (50,000,000) shares of Preferred Stock Series O with a
stated value of US$50.00 per share were issued and are currently outstanding.

The initial dividend rate of 5.9481 percent for Preferred Stock Series P
was determined on September 26, 2007 at a per annum rate of 3-Month LIBOR
plus 0.75 percent in accordance with the Certificate of Designation for
Series P Preferred Stock. The initial dividend rate for Series P will be in
effect from and including September 28, 2007, to but excluding December 31,
2007.

Holders of record of Series P preferred shares will be entitled to
quarterly dividends when and if declared by the Board of Directors of Fannie
Mae. Forty million (40,000,000) shares of Preferred Stock Series P with a
stated value of US$25.00 per share were issued and are currently outstanding.

For more information about the Series O and Series P preferred stock,
interested parties should refer to the respective Certificates of Designation
for those transactions, which are available on Fannie Mae's Web site
(http://www.fanniemae.com).

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.

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.

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