$10 Billion Affordable Mortgage Lending Program Announced by First Horizon and Fannie Mae.

Business Editors

MEMPHIS, Tenn--(BUSINESS WIRE)--Nov. 16, 2001

Thousands of low- and moderate-income families will benefit from Home on the Horizon, a new national mortgage lending initiative announced today in Memphis by First Horizon; First Tennessee Bank, parent company of First Horizon; and Fannie Mae (NYSE:FTN), the nation's largest source of financing for home mortgages. The initiative provides $10 billion in mortgage loans to low- and moderate-income borrowers nationwide.

Home on the Horizon includes an aggressive menu of affordable housing mortgage products designed to break down barriers, lower costs, and increase access to homeownership for low- to moderate-income families and first-time home buyers. These mortgages require little or no down payment; have flexible credit qualifications, providing opportunities for borrowers who have had credit difficulties; allow expanded debt-to-income ratios; and have limited or no reserve requirements. Fannie Mae and First Tennessee/First Horizon will work with down payment assistance providers, home-buyer counseling agencies, and other nonprofit and government groups in an intensive effort to reach these previously underserved borrowers.

Today's announcement was made at the home of Paula and Donnie Cook, first-time home buyers who where able to use First Tennessee/First Horizon's Community 100 mortgage product to buy their home. The Cooks were able to purchase their home in Memphis' Covington Pike neighborhood with less than $1,000 from their own savings and with mortgage financing provided by First Tennessee/First Horizon.

"It's fantastic that thousands of hard-working families will be able to begin building equity in their own homes as a result of this program," said Ken Glass, chief operating officer of First Tennessee/First Horizon. "We recognize that a down payment and closing costs can be obstacles to homeownership. Home on the Horizon is one more way we can offer all things financial to our customers."

"Many families who pay rent are surprised to learn they can afford a mortgage payment," said Jerry Baker, president of First Horizon. "We are partnering with Fannie Mae to close the homeownership gap and provide opportunities for more families to have homes of their own."

This affordable lending initiative with First Horizon is part of Fannie Mae's 10-year, $2 trillion American Dream Commitment(SM) to increase homeownership among minorities, young families, women-headed families, immigrants, and others whose homeownership rates lag behind the general population.

"Homeownership is the single most influential determinant of personal wealth. Home on the Horizon effectively levels the playing field, so to speak, so that more hard-working families have the opportunity to achieve the American Dream," said Mercy Jimenez, senior vice president of Fannie Mae's Southwestern Regional Office. "Fannie Mae is pleased to have found a partner in First Tennessee/First Horizon, which shares our commitment to increasing opportunities for aspiring homeowners throughout Tennessee, and, ultimately, our nation."

Mortgage products offered under the Home on the Horizon initiative include:

Community 97(SM) and Community 100(SM): Allows borrowers earning

up to 100 percent of area median income to purchase a one-unit

home with a 1 percent down payment or $500, whichever is less,

from their own funds. Flexible credit standards allow for

nontraditional credit histories. No cash reserves are required

for mortgages with loan to value ratios of 97 percent or less.

Expanded Approval with Timely Payment Rewards: Offering

competitive rates for borrowers with past credit problems,

Expanded Approval with Timely Payment Rewards gives borrowers

a rate reduction feature if they maintain a good payment

history for 24 months. New cashout refinance parameters help

meet the diverse needs of a wide range of borrowers.

Flexible 97 and Flexible 100: Zero to 3 percent down payment

options are available without income limitations. Flexible

sources of down payment are allowed, meaning that borrowers

may qualify with a down payment coming from a gift or grant

from a church, relative, employer, nonprofit agency, or other

approved source.

Supporting its nationwide mission to increase affordable housing opportunities in a variety of underserved markets, Fannie Mae is providing outreach at the local level, through such measures as home-buying fairs, diversity training for First Tennessee/First Horizon origination and underwriting staff, and broker and Realtor education. In an effort to generate awareness of the Home on the Horizon initiative throughout the broker community in key markets, First Tennessee/First Horizon has presented a dozen breakfast events featuring Fannie Mae representatives in such markets as Phoenix, Denver, Oklahoma City, Houston and Atlanta, to more than 700 attendees. Based on the positive results their partnership has produced to date, First Horizon and Fannie Mae have begun reaching out to new markets with the Home on the Horizon initiative.

For more information about these mortgage products, Tennessee residents may call 866/FTHOMES or 866/384-6637. Residents outside Tennessee should call First Horizon's toll free number 800/615-0822. Consumers can also log on to www.fhhlc.com or www.fthomes.com.

For more information on Fannie Mae's American Dream Commitment, consumers may call Fannie Mae's Consumer Resource Center at 800/7FANNIE 800/732-6643, Monday through Friday from 9 a.m. to 5 p.m. EST.

First Tennessee National Corp. (NYSE:FTN) is a nationwide, diversified financial services institution and one of the 50 largest bank holding companies in the United States in asset size and market capitalization. Banking and other financial services are provided through the regional banking group and three national lines of business: First Horizon Home Loans, First Tennessee Capital Markets, and transaction processing, which includes First Horizon Merchant Services (credit card merchant processing) and Express Processing (nationwide payment processing operation). More information is available at www.FirstTennessee.com.

Fannie Mae is a New York Stock Exchange company and the largest non-bank financial services company in the world. It operates pursuant to a federal charter and is the nation's largest source of financing for home mortgages. Fannie Mae is working to shrink the nation's "homeownership gaps" through a $2 trillion "American Dream Commitment" to increase homeownership rates and serve 18 million targeted American families by the end of the decade. Since 1968, Fannie Mae has provided more than $3.0 trillion of mortgage financing for 40 million families. More information about Fannie Mae can be found on the Internet at http://www.fanniemae.com.

Style Usage: Fannie Mae's Board of Directors has authorized the company to operate as "Fannie Mae," and the company's stock is now listed on the NYSE as "Fannie Mae." In order to facilitate clarity and avoid confusion, news organizations are asked to refer to the company exclusively as "Fannie Mae."