Fannie Mae to Voluntarily Register its Common Stock with Security and Exchange Commission as Company's Seventh Voluntary Commitment Fosters Transparency.

Business Editors

Franklin D. Raines, Chairman and Chief Executive Officer of Fannie Mae (FNM/NYSE), the nation's largest source of financing for home mortgages, today announced that the company will voluntarily register its common stock with the Securities and Exchange Commission (SEC) in 2003, which will permanently require the company to file its periodic financial disclosures to the SEC under the Securities Exchange Act of 1934. Fannie Mae's debt and Mortgage-Backed Securities (MBS) that support the company's secondary market activities will not be subject to the registration process, but investors in those securities will receive and benefit from the mandatory corporate disclosures made regarding Fannie Mae's common stock.

"This is a win-win situation for all," said Raines. "Fannie Mae is pleased to take the type of bold action President Bush has called for to support investor confidence by assuring that our world-class disclosures will continue in perpetuity."

Raines said that Fannie Mae already provides best-in-class disclosure through its annual report, proxy statement, monthly reports of business activities, quarterly investor/analyst report, and additional materials on its Web site. In addition, Raines said, "Almost two years ago, long before the current focus on corporate disclosures, we implemented a set of six voluntary initiatives that placed us at the vanguard with respect to liquidity, transparency, and market discipline. We also have implemented new SEC requirements, such as rapid disclosure of stock trades by senior executives, even before those regulations have been formally adopted. And unlike most corporations, we also benefit from the additional scrutiny provided by our safety and soundness regulator, OFHEO, whose examiners have daily access to our books and records."

Today's announcement was made during a joint press conference with SEC Chairman Harvey Pitt; Office of Federal Housing Enterprise Oversight (OFHEO) Director, Armando Falcon; members of the financial oversight committees in Congress; and Chairman and Chief Executive Officer of Freddie Mac Leland Brendsel.

During the joint press conference, Raines announced that when Fannie Mae registers its common stock, the company becomes irrevocably subject to the periodic disclosure requirements of the Securities Exchange Act of 1934. The company intends to file a Form 10 with an appended Form 10-K in accordance with the SEC annual report deadline in early 2003. Going forward, Fannie Mae will be required to submit to the SEC, Forms 10-K, 10-Q, and 8-K, the periodic financial reports required of SEC registrants. These reports will be available on the SEC's EDGAR system.

With its voluntary action, Fannie Mae commits to the following:

Periodic Reporting. Fannie Mae will file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, together with any required exhibits. These filings will be available on the

SEC's EDGAR system.

SEC Review and Enforcement Authority. All periodic filings by Fannie Mae would be subject to SEC review in the same manner as the SEC reviews the filings of other registered companies.

Regulation FD. Although Fannie Mae has voluntarily complied with Regulation FD (Full Disclosure) since the rule's effectiveness in October 2000, the company will now formally be subject to the provisions of Regulation FD.

Beneficial Ownership Reporting. Holders of 5 percent or more of Fannie Mae's common stock will have to report their ownership to the SEC under Section 13 of the 1934 Act.

With today's announcement, there is no change to Fannie Mae's exempt security status, and there will be no effect on the status of Fannie Mae's securities as "government securities."

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 $3.8 trillion of mortgage financing for over 44 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."