Fannie Mae Helps More Than 4.2 Million Families Through $463 Billion in Targeted Lending in 2001.

Business Editors

WASHINGTON--(BUSINESS WIRE)--March 20, 2002

Record Number of Minorities Served as Company Reports it is Ahead of

Plan to Provide $2 Trillion in Mortgage Financing Through

American Dream Commitment(SM)

Fannie Mae Chairman and CEO, Franklin D. Raines today said that the company set a record in 2001 by providing over $463 billion in financing for 4.2 million U.S. families during the second year of the company's "American Dream Commitment(SM)" to increase homeownership rates and serve 18 million targeted American families.

In addition to reporting on progress made on the $2 trillion initiative, Raines called on the mortgage industry to bring conventional financing to borrowers who have been underserved by the housing finance system. As of December 2001, Fannie Mae has helped 6.2 million families through its American Dream Commitment.

"Fannie Mae and its affordable housing partners are extremely proud of our record-breaking numbers in 2001, in serving minorities and underserved borrowers in their pursuit of the American dream of homeownership," said Raines. "While we celebrate these accomplishments today, we are far from satisfied when the minority homeownership rate still remains roughly 20 points below the national average."

"The American Dream Commitment's achievements are the combined work of many in the industry dedicated to the enormous unfinished business of ensuring equal housing opportunities in our diverse nation," Raines adds. "However, despite enormous progress in the 1990s, too many borrowers are still being overlooked, underserved and overcharged. These same borrowers should be enjoying the benefits of the prime market rates and features. One of the cornerstones of the American Dream Commitment is `the right to equal access to affordable mortgage credit' and we will not rest until more Americans realize this right."

Fannie Mae launched the American Dream Commitment in March 2000 to narrow the homeownership gaps, increase the availability of affordable rental housing, and strengthen communities.

The Commitment consists of a six-point plan: the Mortgage Consumer Rights Agenda; the National Minority Homeownership Initiative; the Opportunity for All Strategy; the America's Living Communities Plan; eHomeownership; and the Affordable Rental Housing Leadership Initiative.

Highlights of Fannie Mae's 2001 American Dream Commitment report include:

-- Fannie Mae served 680,000 minority households totaling nearly $87.6 billion
targeted lending; which:

-- served 153,000 African-American families or $16.6 billion in financing,

-- served 273,000 Hispanic families or $32.7 billion in financing, and

-- served 253,000 other minorities or $38.3 billion in financing;

-- Fannie Mae enabled 2,546 immigrant families to attain homeownership and
affordable housing with $402 million in loans;

-- Fannie Mae served 46 Native-American tribes with a record $81 million in
loans; and

-- Fannie Mae partnered with lenders and community groups to finance $10.3
billion through our efforts to facilitate Community Reinvestment Act-targeted
business.

      In 2001, Fannie Mae made the following progress on the company's
six-point plan:

I.      Mortgage Consumer Rights Agenda

        A set of five principles shared by Fannie Mae and our housing
        partners to protect consumers rights in mortgage finance. The
        2001 highlights are:

          --  The Right to Equal Access to Affordable Mortgage Credit.
            Fannie Mae launched the eZAccess pilot, enabling lenders
            to qualify borrowers in underserved areas who previously
            might not have been approved. Through eZAccess, lenders
            can provide a new mortgage solution to address barriers to
            homeownership - lack of funds for downpayment and closing
            costs, and credit problems. The Expanded Approval mortgage
            product benefited more than 73,000 borrowers last year.
            The Expanded Approval mortgage includes a Timely Payment
            Rewards(SM) (TPR) mortgage option, that provides an
            automatic rate reduction of up to 1 percent after 24
            consecutive months of on-time payments. Fannie Mae also
            expanded the MyCommunityMortgage(SM) suite of products for
            lenders, providing more flexiblility for consumers,
            including customized options for teachers, police, and
            firefighters, resulting in more than $110 million in loan
            deliveries in 2001.

          --  The Right to Know the True Cost of a Mortgage. Consumers
            have a right to know the true cost of the mortgage they
            are getting, including interest rates and points, mortgage
            insurance costs, appraisal fees, title insurance fees, and
            miscellaneous settlement charges. Fannie Mae has enhanced
            the True Cost Calculator(SM) through the company's Web
            site, www.fanniemae.com, providing a free online tool to
            lenders and others to help consumers understand and
            compare the costs of their mortgage options. The True Cost
            Calculator also is available on the Web sites of dozens of
            our lender and industry partners.

          --  The Right to Be Free of Regulatory Burden. Fannie Mae is
            committed to increasing the supply of affordable housing
            by reducing regulatory barriers in communities across
            America. The company's Initiative to Reduce Barriers to
            Affordable Housing seeks to create local partnerships that
            reflect the diverse needs of each community. Fannie Mae is
            working on regulatory barrier initiatives in Kentucky,
            Montana, North Carolina, Pittsburgh, and Seattle, and is
            working to serve as a clearinghouse of "best practices" in
            the field of reducing unnecessary regulations.

      "The Mortgage Consumer Rights Agenda is Fannie Mae's pledge to
tackle one of the toughest issues in housing - the right to the lowest
cost mortgage possible," said Raines. "As an industry, we should be
leading the charge to increase access to suitable mortgage credit,
reduce regulatory barriers, combat predatory lending, and encourage
responsible lending."

II.      The National Minority Homeownership Initiative

           Fannie Mae has challenged the public and private sectors to
         join in setting a national goal of creating five million new
         minority homeowners by 2010. Through the American Dream
         Commitment's National Minority Homeownership Initiative,
         Fannie Mae has committed to contribute at least $420 billion
         in mortgage investments to serve more than three million
         minority households over the decade. The company also has
         pledged to lead the market in affordable lending finance to
         all racial and ethnic groups and is on track to achieve our
         strongest targeted lending performance ever.

          --  Minority Lending. In 2001, Fannie Mae purchased loans
            totaling $87.6 billion of minority lending and served more
            than 680,000 minority households.

          --  Multicultural Markets Initiative. As a result of targeted
            alliances established with national lenders in 2001 to
            increase minority and immigrant homeownership, Fannie Mae
            purchased $2 billion in loans serving minority and
            immigrant families with our lender partners. These lenders
            include: CitiMortgage; Fleet; CTX; Irwin; SunTrust;
            Huntington; CharterOne; Bank One; HomeBanc, and First
            Horizon.

          --  National Partnerships. Fannie Mae created community-based
            lending opportunities by working through expanded
            partnerships with national and local organizations,
            faith-based organizations, minority- and women-owned
            lenders, and community development financial institutions.
            In 2001, Fannie Mae supported 14 national and
            nontraditional partnerships, and implemented eight new
            agreements that have helped to increase homeownership
            opportunities. Some of the partners include: the National
            Urban League; the National Training and Information
            Center; the Neighborhood Reinvestment Corporation; the
            AFL-CIO Investment Trust; and The Enterprise Foundation.

          --  Targeted Initiatives. Fannie Mae, in conjunction with
            national partners and lenders, is working hard to tear
            down barriers to homeownership, including the lack of
            funds for downpayment, blemished credit, nontraditional
            credit, and lack of access to affordable mortgage
            products. Through these targeted initiatives,
            homeownership is becoming a reality for groups such as
            immigrants, faith-based organizations, minority- and
            women-owned lenders, and community development financial
            institutions.

          --  Faith-Based Initiative. This effort establishes strong
            links between the nation's diverse faith-based
            organizations and the housing community to encourage faith
            leaders to become involved in community economic
            development. Working with faith-based groups such as the
            College of Biblical Studies of Houston and the Congress of
            National Black Churches, Fannie Mae is working to ensure
            that these communities receive home-buyer education,
            credit counseling, and mortgage financing.

          --  Minority- and Women-Owned Lenders (MWOL) Initiative.
            Through its Minority- and Women-Owned Lenders (MWOL)
            Initiative, Fannie Mae purchased $6.9 billion in loans,
            more than half were made to minority home buyers in 2001.

          --  Community Development Financial Institutions (CDFIs).
            Community Development Financial Institutions (CDFIs) play
            a critical role in neighborhoods traditionally underserved
            by the housing finance industry. In 2001, Fannie Mae
            committed to invest $18 million in CDFIs, which is
            expected to generate more than 3,300 additional units of
            affordable housing.

          --  Native American Initiative: In 2001, Fannie Mae invested a
            record $81 million and purchased loans made to tribal
            members of 46 different tribes. We are partners with 106
            tribes, already exceeding the goal to partner with 100
            tribes by the end of the decade.

      "We are especially proud of our record financing of housing for
Native Americans in 2001 through targeted initiatives," said Raines.
"Going forward, we will place an even higher emphasis on providing
affordable housing for Native Americans who have systematically been
left out of the homeownership equation."

III.     Opportunity for All Strategy

           Fannie Mae's Opportunity for All strategy is a ten-year
         effort to increase homeownership rates and provide new
         housing support to women-headed households, new immigrants,
         urban households, as well as meeting the unique housing needs
         of seniors, poverty stricken areas in rural communities, and
         those with special needs.

          --  Community Reinvestment Act (CRA) Lending. In 2001, Fannie
            Mae invested more than $10.3 billion in CRA-targeted
            business, including purchases and securitizations of bank
            and thrift customers' branded CRA loan products;
            CRA-targeted loan deliveries through our community-based
            partner, Self Help, a not-for-profit credit union and
            community development financial institution based in
            Durham, NC. Fannie Mae has partnered with the Ford
            Foundation and Self Help to create a vehicle for creating
            and purchasing loans to low-wealth borrowers. Other
            CRA-targeted business has included: sales of special
            CRA-targeted mortgage backed securities and CRA-targeted
            multifamily activities, including low-income housing tax
            credit investments. Fannie Mae also purchased or
            securitized $137.6 billion in low- and moderate-income
            loans, as defined under CRA regulations, in 2001.

          --  Employer-Assisted Housing (EAH). In 2001, Fannie Mae
            helped a record 107 employers develop and implement EAH
            benefit plans designed to help thousands of employees
            achieve homeownership. These employers included: private
            companies, universities, hospitals, nonprofits, and city,
            county, and state entities.

          --  Women-Headed Families. As part of Fannie Mae's
            Women-Headed Household Initiative, the company implemented
            pilots with partners around the country, including the
            McAuley Institute, to help women gain easier access to
            mortgage financing by modifying or clarifying existing
            underwriting guidelines to recognize alternative income
            and credit history, and liabilities such as the financial
            effects of divorce and lack of traditional credit. The
            initiative helped finance more than $47.7 billion in loans
            to women-headed families in 2001.

          --  Americans With Disabilities. In 2001, Fannie Mae products
            served 1,388 households with special needs, many of which
            also have low- to moderate-incomes. Fannie Mae also
            offered lenders several mortgage financing products that
            are targeted to individuals with disabilities, including
            HomeChoice(SM), Retrofitting, and Community Living(R)
            mortgages.

          --  Immigrant Initiative. Fannie Mae enhanced the "Welcome
            Initiative: A New Home in a New Country," a comprehensive
            bilingual marketing campaign to help our lenders address
            the needs of immigrant borrowers nationwide. Through this
            effort, lenders have been able to offer immigrant families
            a Fannie Mae mortgage with small down payments, knocking
            down a major obstacle to homeownership. A total of $402
            million in loans was made to serve 2,546 immigrant
            families under this initiative in 2001.

IV.      America's Living Communities Plan

           Through our American Communities Plan, we are committed to
         being the nation's premier private sector partner for
         investment in targeted communities, and, working with our
         partners, we intend to help create the safest, healthiest,
         most livable communities possible.

          --  American Communities Fund(SM). Through this community
            development investment vehicle, in 2001 the company closed
            $150 million in investments and commitments on 78
            transactions, supporting more than 6,000 housing units.

          --  Partnership Office Initiative. In 2001, Fannie Mae's
            Partnership Office network expanded from 49 to 50 offices
            toward the goal of establishing 60 Partnership Offices
            across the country. The Partnership Offices work with
            local lenders, nonprofit organizations, public officials
            and others to develop products and initiatives unique to
            their markets to expand the company's capacity to increase
            homeownership.

          --  Making a Positive Impact in 300 Communities. Toward the
            10-year goal to make a positive impact in 300 communities
            nationwide, Fannie Mae initiated investment activity in 40
            new neighborhoods in 2001, making the company a key
            partner in 75 neighborhoods in 60 cities. More than $739
            million of Fannie Mae's housing investments are in these
            locations.

V.       eHomeownership

           As one of the world's largest e-business companies, Fannie
         Mae is working with lenders to develop innovative mortgage
         products and technology solutions to help more Americans
         become homeowners, and is committed to an e-commerce
         environment to drive down the costs of mortgage credit and
         increase the availability and accessibility of home loan
         financing to home buyers.

      "These are fundamental objectives of Fannie Mae and we view the
use of technology as an important tool to help us address the unique
and diverse financial needs of families that have been ill-served by
mainstream housing finance," added Raines. "In particular, we aspire
to be the secondary market partner of choice for any partner who is
using the internet to expand affordable housing opportunities."

          --  Home Counselor Online. In 2001, Fannie Mae launched Home
            Counselor Online, empowering homeownership educators and
            counselors to help consumers determine their readiness for
            homeownership faster and better. Since it first went live
            in November 2001 on www.efanniemae.com, more than 320
            homeowner counselors had completed training to use the
            application by year-end.

          --  HomeBuyer Funds Finder. Fannie Mae expanded this pilot in
            2001 to 15 markets to provide housing professionals with a
            centrally located, comprehensive database of housing
            subsidy program information that can be used to help
            home-buying consumers locate down payment and closing cost
            assistance in their geographical areas.

      As the company moves through the decade, Fannie Mae will continue
to harness the power of the Internet to simplify and reduce the costs
of the home-buying process and explore additional options to increase
homeownership opportunities.

VI.      Affordable Rental Housing Leadership Initiative

           For many Americans, the dream of a safe, decent home means a
         safe, clean apartment they can afford. Fannie Mae works with
         its lenders and other partners through the Affordable Rental
         Housing Leadership Initiative to create and preserve
         affordable rental housing.

          --  Delegated Underwriting and Servicing (DUS). Fannie Mae
            participated in financing $16.5 billion of multifamily
            housing through its network of Delegated Underwriting and
            Servicing (DUS) lenders. This investment provides
            flexible, innovative financing and more clean, affordable
            rental housing for families.

          --  Low-Income Housing Tax Credits (LIHTC). Fannie Mae
            invested $1.4 billion in properties nationwide that
            qualify for Low-Income Housing Tax Credits.

"Fannie Mae's ability to make capital available through all economic conditions has helped the company reach record levels in 2001. Over 92 percent of units financed qualified toward the affordable housing goal," said Raines. "The end result is the availability of clean, safe, decent affordable rental housing for several hundred thousand renters across America."

"Through Fannie Mae's American Dream Commitment, we reinvented the company, strengthened lenders' abilities to serve consumers, and created a whole new way of fulfilling the mission of Fannie Mae," Raines said.

Editor's Note: For a copy of the 2001 American Dream Commitment

report, please go to www.fanniemae.com or contact the Fannie Mae

News Bureau at 888/FAN-NOW4 (888/326-6694).

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 $3.6 trillion of mortgage financing for nearly 43 million families. More information about Fannie Mae can be found on the Internet at http://www.fanniemae.com.

American Dream Commitment, Timely Payment Rewards, MyCommunityMortgage, True Cost Calculator, HomeChoice, and American Communities Fund are service marks and Community Living is a registered mark of Fannie Mae. Unauthorized use of these marks is prohibited

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."