8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 6, 2011

Federal National Mortgage Association
(Exact name of registrant as specified in its charter)

Federally chartered corporation	000-50231	52-0883107
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)
3900 Wisconsin Avenue, NW		20016
Washington, DC		(Zip Code)
(Address of principal executive offices)

Registrant’s telephone number, including area code: 202-752-7000

(Former Name or Former Address, if Changed Since Last Report): ________________

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

     The information in this report, including information in the exhibits submitted herewith, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of Section 18, nor shall it be deemed incorporated by reference into any disclosure document relating to Fannie Mae (formally known as the Federal National Mortgage Association), except to the extent, if any, expressly incorporated by specific reference in that document.

Item 2.02 Results of Operations and Financial Condition

     On May 6, 2011, Fannie Mae filed its quarterly report on Form 10-Q for the quarter ended March 31, 2011 and issued a news release reporting its financial results for the periods covered by the Form 10-Q. The news release, a copy of which is furnished as Exhibit 99.1 to this report, is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure

     On May 6, 2011, Fannie Mae posted to its Web site a 2011 First-Quarter Credit Supplement presentation consisting primarily of information about Fannie Mae’s guaranty book of business. The presentation, a copy of which is furnished as Exhibit 99.2 to this report, is incorporated herein by reference. Fannie Mae’s Web site address is www.fanniemae.com. Information appearing on the company’s Web site is not incorporated into this report.

Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits. The exhibit index filed herewith is incorporated herein by reference.

2

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

FEDERAL NATIONAL MORTGAGE ASSOCIATION
By	/s/  David C. Hisey
	David C. Hisey Executive Vice President and Deputy Chief Financial Officer

Date: May 6, 2011

3

EXHIBIT INDEX

The following exhibits are submitted herewith:

Exhibit Number	Description of Exhibit
99.1	News release, dated May 6, 2011
99.2	2011 First-Quarter Credit Supplement presentation, dated May 6, 2011

4

EX-99.1

Exhibit 99.1

Resource Center: 1-800-732-6643

Contact:	Pete Bakel 202-752-2034
Number:	5379a
Date:	May 6, 2011

Fannie Mae Reports First-Quarter 2011 Results

Company Continues to Manage Losses on Legacy Book While Building
Strong New Book of Business

WASHINGTON, DC — Fannie Mae (FNMA/OTC) today reported a net loss of $6.5 billion in the first quarter of 2011, compared to net income of $73 million in the fourth quarter of 2010 (which reflected a $1.2 billion reduction to credit-related expenses resulting from the successful resolution of certain outstanding repurchase requests), and a net loss of $11.5 billion in the first quarter of 2010. The change to a net loss in the first quarter of 2011 from net income in the fourth quarter was due to an increase in credit-related expenses, primarily driven by a decline in home prices during the quarter. The company estimates that, although home prices have improved in some geographic regions, home prices on a national basis declined by 1.8 percent in the first quarter of 2011, which had a direct and negative impact on its credit-related expenses. Substantially all of the company’s credit-related expenses in the first quarter were related to the company’s legacy (pre-2009) book of business. While the company continues to work through losses on its legacy book, it expects that the single-family loans it has acquired since January 2009 will be profitable over their lifetime.

“We expect our credit-related expenses to remain elevated in 2011 as we continue to be negatively impacted by the prolonged decline in home prices,” said Michael J. Williams, president and chief executive officer. “As we move forward, we are building a strong new book of business that now accounts for 45 percent of the company’s overall single-family guaranty book of business. We continue to be the leading provider of liquidity for single-family mortgages and affordable multifamily rental housing while we remain focused on our responsibility to find solutions for distressed homeowners and their families.”

Fannie Mae continues to strengthen its book of business. Single-family loans acquired from January 2009 forward have a strong credit profile. For more information on the expected lifetime profitability of the company’s new single-family book of business, please refer to Table 1 in the company’s quarterly report on Form 10-Q for the quarter ended March 31, 2011.

The vast majority of the company’s credit losses in the first quarter were attributable to single-family loans that Fannie Mae purchased or guaranteed from 2005 through 2008. The company’s single-family book of business had $206 billion in nonperforming loans as of March 31, 2011. As Fannie Mae manages losses on its legacy book, the company is maintaining a clear focus on its priorities and providing liquidity to the market, setting new standards for sustainable lending, and supporting programs to help families stay in their homes.

First-Quarter 2011 Results 1

The company’s net loss attributable to common stockholders in the first quarter of 2011 was $8.7 billion, or $(1.52) per diluted share, including $2.2 billion in dividend payments to the U.S. Treasury. As of March 31, 2011, the company’s net worth deficit was $8.4 billion. The Federal Housing Finance Agency (FHFA) has requested $8.5 billion on the company’s behalf from Treasury to eliminate the deficit. Upon receipt of those funds, the company’s total obligation to Treasury for its senior preferred stock will be $99.7 billion. Since its senior preferred stock was issued, the company has paid a total of $12.4 billion in dividends to Treasury.

Providing Liquidity to the Market

In the first quarter of 2011, Fannie Mae purchased or guaranteed approximately $189 billion in loans, measured by unpaid principal balance, which includes approximately $20 billion in delinquent loans purchased from its single-family mortgage-backed securities (MBS) trusts. Excluding delinquent loans purchased from its MBS trusts, Fannie Mae’s purchases and guarantees enabled its lender customers to finance approximately 759,000 single-family conventional loans and multifamily loans secured by multifamily properties with approximately 83,000 units.

Fannie Mae remained the largest single issuer of mortgage-related securities in the secondary market in the first quarter of 2011, with an estimated market share of new single-family mortgage-related securities issuances of 48.6 percent, compared to 49.0 percent in the fourth quarter of 2010. If the Federal Housing Administration continues to be the lower cost option for some consumers, the company’s market share could be adversely impacted if the market shifts away from refinance activity, which is likely to occur when interest rates rise. Fannie Mae also remains a constant source of liquidity in the multifamily market. Currently, the company owns or guarantees approximately one-fifth of the outstanding debt on multifamily properties.

Credit Quality

New Single-Family Book of Business: Forty-five percent of Fannie Mae’s single-family guaranty book of business as of March 31, 2011 consisted of loans it had purchased or guaranteed since the beginning of 2009. The company continues to expect that these loans will be profitable over their lifetime, given their strong credit risk profile and performance to date. Conventional single-family loans added to Fannie Mae’s book of business since January 1, 2009 have a weighted average loan-to-value ratio at origination of 68 percent, and a weighted average credit score at origination of 762. The ultimate performance of loans the company has acquired since January 2009 will be affected by macroeconomic trends, including unemployment, the economy, and home prices.

2005 – 2008 Single-Family Book of Business: The single-family credit losses the company realized from January 1, 2009 through March 31, 2011, combined with the amounts the company has reserved for single-family credit losses as of March 31, 2011, total approximately $120 billion, which includes a portion of the company’s fair value losses on credit impaired loans that the company deems an “effective reserve” for future credit losses. The vast majority of these losses were attributable to single-family loans the company acquired from 2005 through 2008. The company expects that future defaults on its legacy book and the resulting charge-offs will occur over a period of years.

First-Quarter 2011 Results 2

Fannie Mae’s single-family serious delinquency rate decreased to 4.27 percent as of March 31, 2011, from 4.48 percent as of December 31, 2010, and from 5.47 percent as of March 31, 2010. The decrease in Fannie Mae’s single-family serious delinquency rate was primarily the result of home retention solutions, mainly loan modifications, and foreclosure alternatives completed, combined with foreclosures when a viable solution was not available. The volume of loans impacted by these actions continues to exceed the number of loans becoming seriously delinquent, thereby decreasing the percentage of the company’s seriously delinquent loans. The decrease also is attributable to the company’s acquisition of loans with stronger credit profiles in 2010 and the first quarter of 2011.

Foreclosure Prevention

Loan Workouts: During the first quarter of 2011, Fannie Mae completed more than 78,000 single-family loan workouts, including more than 60,000 home-retention solutions (modifications, repayment plans, and forbearances). Details of the company’s home-retention solutions and foreclosure alternatives include:

• Loan modifications, which include permanent modifications under the Treasury Department’s Home Affordable Modification Program, decreased in the first quarter of 2011 to 51,043 from 81,692 in the fourth quarter of 2010. These figures do not include modifications in trial periods.

• Repayment plans/forbearances of 9,916, compared with 7,973 in the fourth quarter of 2010.

• Preforeclosure sales and deeds-in-lieu of foreclosure of 17,120, compared with 15,632 in the fourth quarter of 2010.

Homeowner Initiatives: In the first quarter of 2011, Fannie Mae continued to develop programs and invest in initiatives that are designed to help keep people in homes, assist prospective homeowners, and support the mortgage and housing markets overall. Fannie Mae expanded its homeowner outreach initiatives and celebrated the one year anniversary of the Miami Mortgage Help Center in March. Since opening a year ago, the center’s staff has reached out to more than 5,000 struggling homeowners with loans owned by Fannie Mae. More than 1,000 responded, resulting in nearly two-thirds of those families securing a solution to stay in their homes. As of March 31, 2011, Fannie Mae had established six Mortgage Help Centers that completed approximately 800 home retention plans in the first quarter of 2011. Since the end of the quarter, the company has established three more centers in Tampa, FL; Jacksonville, FL; and Philadelphia, PA. The company also uses direct mail and phone calls to encourage homeowners to pursue foreclosure alternatives, and also has established partnerships with counseling agencies in other communities to provide similar services.

Foreclosures and REO

Fannie Mae acquired 53,549 single-family real-estate owned (REO) properties through foreclosure in the first quarter of 2011, compared with 45,962 in the fourth quarter of 2010. As of March 31, 2011, the company’s inventory of single-family REO properties was 153,224, compared with 162,489 as of December 31, 2010. The carrying value of the company’s single-family REO was $14.1 billion, compared with $15.0 billion as of December 31, 2010.

First-Quarter 2011 Results 3

The company’s single-family foreclosure rate was 1.19 percent on an annualized basis in the first quarter of 2011, compared with 1.03 percent in the fourth quarter of 2010. This reflects the annualized number of single-family properties acquired through foreclosure, as a percentage of the total number of loans in Fannie Mae’s conventional single-family guaranty book of business.

Summary of First-Quarter 2011 Results

Fannie Mae reported a net loss of $6.5 billion for the first quarter of 2011, compared to net income of $73 million in the fourth quarter of 2010. The company’s net loss attributable to common stockholders was $8.7 billion, or $(1.52) per diluted share, compared with a loss of $2.1 billion in the fourth quarter of 2010, or $(0.37) per diluted share. The net worth deficit of $8.4 billion as of March 31, 2011 takes into account dividends paid on senior preferred stock held by Treasury.

(dollars in millions, except per share amounts) (1)	1Q11			4Q10			Variance			1Q11			1Q10			Variance
Net interest income	$	4,960		$	4,637		$	323		$	4,960		$	2,789		$	2,171
Fee and other income (1)(2)		237			253			(16	)		237			233			4
Net revenues		5,197			4,890			307			5,197			3,022			2,175
Investment gains, net		75			75			—			75			166			(91	)
Net other-than-temporary impairments		(44	)		(23	)		(21	)		(44	)		(236	)		192
Fair value gains (losses), net		289			366			(77	)		289			(1,705	)		1,994
Administrative expenses		(605	)		(592	)		(13	)		(605	)		(605	)		—
Credit-related expenses (3)		(11,042	)		(4,318	)		(6,724	)		(11,042	)		(11,884	)		842
Other non-interest expenses (1)(4)		(339	)		(348	)		9			(339	)		(354	)		15
Net losses and expenses		(11,666	)		(4,840	)		(6,826	)		(11,666	)		(14,618	)		2,952
Income (loss) before federal income taxes		(6,469	)		50			(6,519	)		(6,469	)		(11,596	)		5,127
Benefit (provision) for federal income taxes		(2	)		15			(17	)		(2	)		67			(69	)
Net income (loss)		(6,471	)		65			(6,536	)		(6,471	)		(11,529	)		5,058
Less: Net (income) loss attributable to the noncontrolling interest		—			8			(8	)		—			(1	)		1
Net income (loss) attributable to Fannie Mae	$	(6,471	)	$	73		$	(6,544	)	$	(6,471	)	$	(11,530	)	$	5,059
Preferred stock dividends		(2,216	)		(2,154	)		(62	)		(2,216	)		(1,527	)		(689	)
Net loss attributable to common stockholders	$	(8,687	)	$	(2,081	)	$	(6,606	)	$	(8,687	)	$	(13,057	)	$	4,370
Diluted loss per common share	$	(1.52	)	$	(0.37	)	$	(1.15	)	$	(1.52	)	$	(2.29	)	$	0.77

(1)	Certain prior period amounts have been reclassified to conform to the current period presentation.
(2)	Trust management income and guaranty fee income are included in fee and other income.
(3)	Consists of provision for loan losses, provision for guaranty losses and foreclosed property expense.
(4)	Consists of debt extinguishment losses, net, losses from partnership investments and other expenses.

Net revenues were $5.2 billion in the first quarter of 2011, up six percent from $4.9 billion in the fourth quarter of 2010, due to an increase in net interest income.

First-Quarter 2011 Results 4

Credit-related expenses, which are the total provision for credit losses plus foreclosed property expense, were $11.0 billion in the first quarter of 2011, up from $4.3 billion in the fourth quarter of 2010. The higher provision for credit losses during the period was primarily driven by an increase in total loss reserves due to a decline in home prices and increase in initial charge-off severity during the period, the number of loans that entered into a trial modification period during the quarter, a decline in future expected home prices, and an extended timeframe of loan delinquencies as a result of delays caused by servicer foreclosure process deficiencies and the resulting foreclosure pause. In addition, the fourth quarter of 2010 reflects a $1.2 billion reduction to credit-related expenses resulting from the successful resolution of certain outstanding repurchase requests.

Credit losses, which the company defines generally as net charge-offs plus foreclosed property expense, excluding the effect of certain fair-value losses, were $5.7 billion in the first quarter of 2011, compared with $3.2 billion in the fourth quarter of 2010. As discussed above, the fourth quarter of 2010 reflected a $1.2 billion reduction to charge-offs and foreclosed property expense resulting from the successful resolution of certain outstanding repurchase requests. Additionally, the increase in credit losses in the first quarter of 2011 continues to reflect an increase in charge-offs due to higher loss severities arising from a continued decline in home prices.

Total loss reserves and fair value losses previously recognized on acquired credit-impaired loans were $90.6 billion as of March 31, 2011, compared with $85.4 billion as of December 31, 2010. The company considers a portion of total fair value losses previously recognized on loans purchased out of MBS trusts as an “effective reserve,” apart from its total loss reserves, to the extent that the company expects to realize credit losses on the acquired loans in the future.

Net fair value gains were $289 billion in the first quarter of 2011, compared to $366 million in the fourth quarter of 2010. This was primarily due to gains recognized on trading securities.

Net Worth and U.S. Treasury Funding

The Acting Director of FHFA has requested $8.5 billion of funds from Treasury on the company’s behalf under the terms of the senior preferred stock purchase agreement between Fannie Mae and Treasury to eliminate the company’s net worth deficit as of March 31, 2011. Fannie Mae’s first-quarter dividend of $2.2 billion on its senior preferred stock held by Treasury was declared by FHFA and paid by the company on March 31, 2011.

In March 2011, Treasury provided to the company $2.6 billion to cure its net worth deficit as of December 31, 2010. As a result of this draw, the aggregate liquidation preference of the senior preferred stock increased from $88.6 billion to $91.2 billion as of March 31, 2011. It will increase to $99.7 billion upon the receipt of funds from Treasury to eliminate the company’s first-quarter 2011 net worth deficit, which will require an annualized dividend payment of $10.0 billion. This amount exceeds the company’s reported annual net income for each year since its inception.

First-Quarter 2011 Results 5

Fair Value Update

The fair value of Fannie Mae’s net assets decreased by $10.8 billion from December 31, 2010, resulting in a fair value net deficit of $131.1 billion as of March 31, 2011, compared to a fair value net deficit of $120.3 billion as of December 31, 2010. This decrease was due primarily to credit-related items, principally related to declining actual and expected home prices, as well as a decrease in the estimated rate of prepayments. These credit-related items increased the expected life of the guaranty book of business and increased expected credit losses. The decrease due to credit-related items was partially offset by an increase in the fair value of the net portfolio attributable to the positive impact of the spread between mortgage assets and associated debt and derivatives.

As part of Fannie Mae’s disclosure requirements with FHFA, the company discloses on a quarterly basis supplemental non-GAAP consolidated fair value balance sheets, reflecting the company’s assets and liabilities at estimated fair value. The fair value of the company’s net assets is not a measure defined within generally accepted accounting principles and may not be comparable to similarly titled measures reported by other companies. The estimated fair value of the company’s net assets is calculated as of a particular point in time based on its existing assets and liabilities, and does not incorporate other factors that may have a significant impact on its long-term fair value. As a result, the estimated fair value of the company’s net assets presented in its non-GAAP consolidated fair value balance sheets does not represent an estimate of its net realizable value, liquidation value, or its market value as a whole. In addition, the fair value of the company’s net assets attributable to common stockholders presented in its fair value balance sheet does not represent an estimate of the value it expects to realize from operating the company, nor what it expects to draw from Treasury under the terms of the senior preferred stock purchase agreement.

For more information on the change in the company’s fair value net deficit, please refer to “Supplemental Non-GAAP Information — Fair Value Balance Sheets” in the company’s quarterly report on Form 10-Q for the quarter ended March 31, 2011. See also “Supplemental Non-GAAP Consolidated Fair Value Balance Sheets” and “Explanation and Reconciliation of Non-GAAP Measures to GAAP Measures” later in this release for a reconciliation of the company’s fair value balance sheets to its GAAP consolidated balance sheets.

Business Segment Results

Fannie Mae conducts its activities through three complementary businesses: its Single-Family business, its Multifamily business, and its Capital Markets group. The company’s Single-Family and Multifamily businesses work with Fannie Mae’s lender customers, who deliver mortgage loans that the company purchases and securitizes into Fannie Mae MBS. The Capital Markets group manages the company’s investment activity in mortgage-related assets, funding investments primarily with proceeds received from the issuance of Fannie Mae debt securities in the domestic and international capital markets. The Capital Markets group also provides liquidity to the mortgage market through short-term financing and other activities.

First-Quarter 2011 Results 6

Single-Family guaranty book of business was $2.90 trillion as of March 31, 2011, compared with $2.87 trillion as of December 31, 2010. Single-Family guaranty fee income for the first quarter of 2011 was $1.9 billion, compared with $1.8 billion for the fourth quarter of 2010. The Single-Family business lost $10.7 billion in the first quarter of 2011, compared with a loss of $3.6 billion in the fourth quarter of 2010, due primarily to credit-related expenses of $11.1 billion, the vast majority of which were attributable to loans purchased or guaranteed from 2005 through 2008.

Multifamily guaranty book of business was $190.6 billion as of March 31, 2011, compared with $189.4 billion as of December 31, 2010. Multifamily recorded credit-related income of $64 million in the first quarter of 2011, compared with credit-related expenses of $254 million in the fourth quarter of 2010. Multifamily earned $247 million in the first quarter of 2011, compared with a $183 million loss in the fourth quarter of 2010.

Capital Markets’ net interest income was $3.7 billion in the first quarter of 2011, the same as the fourth quarter of 2010. Fair value gains were $218 million, compared with $358 million in the fourth quarter of 2010. Net other-than-temporary impairments were $44 million, compared with $24 million in the fourth quarter of 2010. The net mortgage investment portfolio balance decreased to $757.6 billion as of March 31, 2011, compared with $788.8 billion as of December 31, 2010, resulting from purchases of $43.2 billion, liquidations of $38.9 billion, and sales of $35.4 billion during the quarter. Capital Markets earned $4.3 billion in the first quarter of 2011, compared with $4.7 billion in the fourth quarter of 2010.

The company provides further discussion of its financial results and condition, credit performance, fair value balance sheets, and other matters in its quarterly report on Form 10-Q for the quarter ended March 31, 2011, which was filed today with the Securities and Exchange Commission. Further information about the company’s credit performance, the characteristics of its guaranty book of business, the drivers of its credit losses, its foreclosure-prevention efforts, and other measures is contained in the “2011 First-Quarter Credit Supplement” on Fannie Mae’s Web site, www.fanniemae.com.

# # #

In this release, the company has presented a number of estimates, forecasts, expectations, and other forward-looking statements regarding the company’s future financial results; the profitability of its loans; future credit losses, credit-related expenses, defaults, and charge-offs; its draws from and dividends to be paid to Treasury; the performance and caliber of loans it has acquired and will acquire; future home prices; future market share; future refinance activity; and future prepayment rates. These estimates, forecasts, expectations, and statements are forward-looking statements and are based on the company’s current assumptions regarding numerous factors, including assumptions about future home prices and the future performance of its loans. The company’s future estimates of these amounts, as well as the actual amounts, may differ materially from its current estimates as a result of home price changes, interest rate changes, unemployment, other macroeconomic variables, government policy matters, changes in generally accepted accounting principles, credit availability, social behaviors, the volume of loans it modifies, the effectiveness of its loss mitigation strategies, management of its real estate owned inventory and pursuit of contractual remedies, changes in the fair value of its assets and liabilities, impairments of its assets, the adequacy of its loss reserves, its ability to maintain a positive net worth, effects from activities the company takes to support the mortgage market and help homeowners, the conservatorship and its effect on the company’s business, the investment by Treasury and its effect on the company’s business, changes in the structure and regulation of the financial services industry, the company’s ability to access the debt markets, disruptions in the housing, credit, and stock markets, government investigations and litigation, the extent of the servicer foreclosure process deficiencies and the duration of the related foreclosure pause, and many other factors. Changes in the company’s underlying assumptions and actual outcomes, which could be affected by the economic environment, government policy, and many other factors, including those discussed in the “Risk Factors” sections of the company’s annual report on Form 10-K for the year ended December 31, 2010 and quarterly report on Form 10-Q for the quarter ended March 31, 2011 and elsewhere in this release, could result in actual results being materially different from what is set forth in the forward-looking statements.

Fannie Mae provides Web site addresses in its news releases solely for readers’ information. Other content or information appearing on these Web sites is not part of this release.

Fannie Mae exists 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 enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.

First-Quarter 2011 Results 7

ANNEX I

FANNIE MAE
(In conservatorship)

Condensed Consolidated Balance Sheets—(Unaudited)
(Dollars in millions, except share amounts)

	As of
	March 31,			December 31,
	2011			2010
ASSETS
Cash and cash equivalents (includes $717 and $348, respectively, related to consolidated trusts)	$	19,831		$	17,297
Restricted cash (includes $33,405 and $59,619, respectively, related to consolidated trusts)		36,730			63,678
Federal funds sold and securities purchased under agreements to resell or similar arrangements		26,250			11,751
Investments in securities:
Trading, at fair value (includes $21 as of both periods related to consolidated trusts)		57,035			56,856
Available-for-sale, at fair value (includes $1,678 and $1,055, respectively, related to consolidated trusts)		89,613			94,392
Total investments in securities		146,648			151,248
Mortgage loans:
Loans held for sale, at lower of cost or fair value (includes $1,055 and $661, respectively, related to consolidated trusts)		1,414			915
Loans held for investment, at amortized cost:
Of Fannie Mae		402,352			407,228
Of consolidated trusts (includes $2,969 and $2,962, respectively, at fair value and loans pledged as collateral that may be sold or repledged of $2,241 and $2,522, respectively)		2,613,848			2,577,133
Total loans held for investment		3,016,200			2,984,361
Allowance for loan losses		(67,557	)		(61,556	)
Total loans held for investment, net of allowance		2,948,643			2,922,805
Total mortgage loans		2,950,057			2,923,720
Accrued interest receivable, net (includes $8,918 and $8,910, respectively, related to consolidated trusts)		11,303			11,279
Acquired property, net		15,264			16,173
Other assets (includes $242 and $593, respectively, related to consolidated trusts)		20,959			26,826
Total assets	$	3,227,042		$	3,221,972
LIABILITIES AND EQUITY (DEFICIT)
Liabilities:
Accrued interest payable (includes $9,673 and $9,712, respectively, related to consolidated trusts)	$	13,828		$	13,764
Federal funds purchased and securities sold under agreements to repurchase		25			52
Debt:
Of Fannie Mae (includes $884 and $893, respectively, at fair value)		761,187			780,044
Of consolidated trusts (includes $2,193 and $2,271, respectively, at fair value)		2,447,589			2,416,956
Other liabilities (includes $713 and $893, respectively, related to consolidated trusts)		12,831			13,673
Total liabilities		3,235,460			3,224,489
Commitments and contingencies (Note 14)		—			—
Fannie Mae stockholders’ equity (deficit):
Senior preferred stock, 1,000,000 shares issued and outstanding		91,200			88,600
Preferred stock, 700,000,000 shares are authorized—576,868,039 and 576,868,139 shares issued and outstanding, respectively		20,204			20,204
Common stock, no par value, no maximum authorization—1,270,092,862 and 1,270,092,708 shares issued, respectively; 1,119,073,956 and 1,118,504,194 shares outstanding, respectively		667			667
Accumulated deficit		(111,669	)		(102,986	)
Accumulated other comprehensive loss		(1,501	)		(1,682	)
Treasury stock, at cost, 151,018,906 and 151,588,514 shares, respectively		(7,400	)		(7,402	)
Total Fannie Mae stockholders’ deficit		(8,499	)		(2,599	)
Noncontrolling interest		81			82
Total deficit		(8,418	)		(2,517	)
Total liabilities and equity (deficit)	$	3,227,042		$	3,221,972

See Notes to Condensed Consolidated Financial Statements

First-Quarter 2011 Results 8

FANNIE MAE
(In conservatorship)

Condensed Consolidated Statements of Operations and Comprehensive Loss—(Unaudited)
(Dollars and shares in millions, except per share amounts)

	For the Three
	Months Ended
	March 31,
	2011			2010
Interest income:
Trading securities	$	284		$	315
Available-for-sale securities		1,213			1,473
Mortgage loans (includes $31,865 and $34,321, respectively, related to consolidated trusts)		35,590			37,619
Other		28			39
Total interest income		37,115			39,446
Interest expense:
Short-term debt (includes $3 and $2, respectively, related to consolidated trusts)		107			118
Long-term debt (includes $27,852 and $31,458, respectively, related to consolidated trusts)		32,048			36,539
Total interest expense		32,155			36,657
Net interest income		4,960			2,789
Provision for loan losses		(10,587	)		(11,939	)
Net interest loss after provision for loan losses		(5,627	)		(9,150	)
Investment gains, net		75			166
Other-than-temporary impairments		(57	)		(186	)
Noncredit portion of other-than-temporary impairments recognized in other comprehensive income		13			(50	)
Net other-than-temporary impairments		(44	)		(236	)
Fair value gains (losses), net		289			(1,705	)
Debt extinguishment gains (losses), net		13			(124	)
Fee and other income		237			233
Non-interest income (loss)		570			(1,666	)
Administrative expenses:
Salaries and employee benefits		320			324
Professional services		189			194
Occupancy expenses		42			41
Other administrative expenses		54			46
Total administrative expenses		605			605
Benefit for guaranty losses		(33	)		(36	)
Foreclosed property expense (income)		488			(19	)
Other expenses		352			230
Total expenses		1,412			780
Loss before federal income taxes		(6,469	)		(11,596	)
Provision (benefit) for federal income taxes		2			(67	)
Net loss		(6,471	)		(11,529	)
Other comprehensive income:
Changes in unrealized losses on available-for-sale securities, net of reclassification adjustments and taxes		179			1,370
Other		2			2
Total other comprehensive income		181			1,372
Total comprehensive loss		(6,290	)		(10,157	)
Less: Comprehensive income attributable to the noncontrolling interest		—			(1	)
Total comprehensive loss attributable to Fannie Mae	$	(6,290	)	$	(10,158	)
Net loss	$	(6,471	)	$	(11,529	)
Less: Net income attributable to the noncontrolling interest		—			(1	)
Net loss attributable to Fannie Mae		(6,471	)		(11,530	)
Preferred stock dividends		(2,216	)		(1,527	)
Net loss attributable to common stockholders	$	(8,687	)	$	(13,057	)
Loss per share—Basic and Diluted	$	(1.52	)	$	(2.29	)
Weighted-average common shares outstanding—Basic and Diluted		5,698			5,692

See Notes to Condensed Consolidated Financial Statements

First-Quarter 2011 Results 9

FANNIE MAE
(In conservatorship)

Condensed Consolidated Statements of Cash Flows—(Unaudited)
(Dollars in millions)

	For the Three
	Months Ended
	March 31,
	2011			2010
Net cash provided by (used in) operating activities	$	2,566		$	(30,885	)
Cash flows provided by investing activities:
Purchases of trading securities held for investment		(185	)		(6,695	)
Proceeds from maturities of trading securities held for investment		522			805
Proceeds from sales of trading securities held for investment		409			15,068
Purchases of available-for-sale securities		(44	)		(107	)
Proceeds from maturities of available-for-sale securities		3,851			4,120
Proceeds from sales of available-for-sale securities		498			4,428
Purchases of loans held for investment		(15,745	)		(12,725	)
Proceeds from repayments of loans held for investment of Fannie Mae		5,381			3,920
Proceeds from repayments of loans held for investment of consolidated trusts		121,533			108,903
Net change in restricted cash		26,948			3,174
Advances to lenders		(15,646	)		(10,338	)
Proceeds from disposition of acquired property and preforeclosure sales		10,979			7,678
Net change in federal funds sold and securities purchased under agreements to resell or similar agreements		(14,499	)		(9,135	)
Other, net		(163	)		(382	)
Net cash provided by investing activities		123,839			108,714
Cash flows used in financing activities:
Proceeds from issuance of debt of Fannie Mae		163,776			293,013
Payments to redeem debt of Fannie Mae		(183,073	)		(277,495	)
Proceeds from issuance of debt of consolidated trusts		72,567			88,750
Payments to redeem debt of consolidated trusts		(177,551	)		(172,385	)
Payments of cash dividends on senior preferred stock to Treasury		(2,216	)		(1,527	)
Proceeds from senior preferred stock purchase agreement with Treasury		2,600			15,300
Net change in federal funds purchased and securities sold under agreements to repurchase		26			180
Net cash used in financing activities		(123,871	)		(54,164	)
Net increase in cash and cash equivalents		2,534			23,665
Cash and cash equivalents at beginning of period		17,297			6,812
Cash and cash equivalents at end of period	$	19,831		$	30,477
Cash paid during the period for interest	$	32,689		$	36,788

See Notes to Condensed Consolidated Financial Statements

First-Quarter 2011 Results 10

Supplemental Non-GAAP Consolidated Fair Value Balance Sheets

	As of March 31, 2011									As of December 31, 2010
	GAAP									GAAP
	Carrying			Fair Value			Estimated			Carrying			Fair Value			Estimated
	Value			Adjustment(1)			Fair Value			Value			Adjustment(1)			Fair Value
	(Dollars in millions)
Assets:
Cash and cash equivalents	$	56,561		$	—		$	56,561		$	80,975		$	—		$	80,975
Federal funds sold and securities purchased under agreements to resell or similar arrangements		26,250			—			26,250			11,751			—			11,751
Trading securities		57,035			—			57,035			56,856			—			56,856
Available-for-sale securities		89,613			—			89,613			94,392			—			94,392
Mortgage loans:
Mortgage loans held for sale		1,414			44			1,458			915			—			915
Mortgage loans held for investment, net of allowance for loan losses:
Of Fannie Mae		348,644			(35,472	)		313,172			358,698			(39,331	)		319,367
Of consolidated trusts		2,599,999			18,737	(2)		2,618,736	(3)		2,564,107			46,038	(2)		2,610,145	(3)
Total mortgage loans		2,950,057			(16,691	)		2,933,366	(4)		2,923,720			6,707			2,930,427	(4)
Advances to lenders		3,091			(151	)		2,940	(5)(6)		7,215			(225	)		6,990	(5)(6)
Derivative assets at fair value		279			—			279	(5)(6)		1,137			—			1,137	(5)(6)
Guaranty assets and buy-ups, net		459			440			899	(5)(6)		458			356			814	(5)(6)
Total financial assets		3,183,345			(16,402	)		3,166,943	(7)		3,176,504			6,838			3,183,342	(7)
Credit enhancements		471			3,406			3,877	(5)(6)		479			3,286			3,765	(5)(6)
Other assets		43,226			(240	)		42,986	(5)(6)		44,989			(261	)		44,728	(5)(6)
Total assets	$	3,227,042		$	(13,236	)	$	3,213,806		$	3,221,972		$	9,863		$	3,231,835
Liabilities:
Federal funds purchased and securities sold under agreements to repurchase	$	25		$	—		$	25		$	52		$	(1	)	$	51
Short-term debt:
Of Fannie Mae		147,092			41			147,133			151,884			90			151,974
Of consolidated trusts		5,156			—			5,156			5,359			—			5,359
Long-term debt:
Of Fannie Mae		614,095	(8)		19,055			633,150			628,160	(8)		21,524			649,684
Of consolidated trusts		2,442,433	(8)		88,041	(2)		2,530,474			2,411,597	(8)		103,332	(2)		2,514,929
Derivative liabilities at fair value		941			—			941	(9)(10)		1,715			—			1,715	(9)(10)
Guaranty obligations		760			2,667			3,427	(9)(10)		769			3,085			3,854	(9)(10)
Total financial liabilities		3,210,502			109,804			3,320,306	(7)		3,199,536			128,030			3,327,566	(7)
Other liabilities		24,958			(398	)		24,560	(9)(10)		24,953			(472	)		24,481	(9)(10)
Total liabilities		3,235,460			109,406			3,344,866			3,224,489			127,558			3,352,047
Equity (deficit):
Fannie Mae stockholders’ equity (deficit):
Senior preferred(11)		91,200			—			91,200			88,600			—			88,600
Preferred		20,204			(18,987	)		1,217			20,204			(19,829	)		375
Common		(119,903	)		(103,655	)		(223,558	)		(111,403	)		(97,866	)		(209,269	)
Total Fannie Mae stockholders’ deficit/non-GAAP fair value of net assets	$	(8,499	)	$	(122,642	)	$	(131,141	)	$	(2,599	)	$	(117,695	)	$	(120,294	)
Noncontrolling interests		81			—			81			82			—			82
Total deficit		(8,418	)		(122,642	)		(131,060	)		(2,517	)		(117,695	)		(120,212	)
Total liabilities and equity (deficit)	$	3,227,042		$	(13,236	)	$	3,213,806		$	3,221,972		$	9,863		$	3,231,835

See Explanation and Reconciliation of Non-GAAP Measures to GAAP Measures

First-Quarter 2011 Results 11

Explanation and Reconciliation of Non-GAAP Measures to GAAP Measures

(1)	Each of the amounts listed as a “fair value adjustment” represents the difference between the carrying value included in our GAAP condensed consolidated balance sheets and our best judgment of the estimated fair value of the listed item.
(2)	Fair value exceeds carrying value of consolidated loans and consolidated debt as a significant portion of these were consolidated at unpaid principal balance as of January 1, 2010, upon adoption of accounting standards on transfers of financial assets and consolidation of VIEs. Also impacting the difference between fair value and carrying value of the consolidated loans is the credit component included in consolidated loans, which has no corresponding impact on the consolidated debt.
(3)	Includes certain mortgage loans that we elected to report at fair value in our GAAP condensed consolidated balance sheet of $3.0 billion as of both March 31, 2011 and December 31, 2010.
(4)	Performing loans had both a fair value and an unpaid principal balance of $2.8 trillion as of March 31, 2011 compared with a fair value of $2.8 trillion and an unpaid principal balance of $2.7 trillion as of December 31, 2010. Nonperforming loans, which include loans that are delinquent by one or more payments, had a fair value of $143.4 billion and an unpaid principal balance of $254.4 billion as of March 31, 2011 compared with a fair value of $168.5 billion and an unpaid principal balance of $287.4 billion as of December 31, 2010. See “Note 13, Fair Value” for additional information on valuation techniques for performing and nonperforming loans.
(5)	The following line items: (a) Advances to lenders; (b) Derivative assets at fair value; (c) Guaranty assets and buy-ups, net; (d) Credit enhancements; and (e) Other assets, together consist of the following assets presented in our GAAP condensed consolidated balance sheets: (a) Accrued interest receivable, net; (b) Acquired property, net; and (c) Other assets.
(6)	“Other assets” include the following GAAP condensed consolidated balance sheets line items: (a) Accrued interest receivable, net and (b) Acquired property, net. The carrying value of these items in our GAAP condensed consolidated balance sheets totaled $26.6 billion and $27.5 billion as of March 31, 2011 and December 31, 2010, respectively. “Other assets” in our GAAP condensed consolidated balance sheets include the following: (a) Advances to Lenders; (b) Derivative assets at fair value; (c) Guaranty assets and buy-ups, net; and (d) Credit enhancements. The carrying value of these items totaled $4.3 billion and $9.3 billion as of March 31, 2011 and December 31, 2010, respectively.
(7)	We determined the estimated fair value of these financial instruments in accordance with the fair value accounting standard as described in “Note 13, Fair Value.”
(8)	Includes certain long-term debt instruments that we elected to report at fair value in our GAAP condensed consolidated balance sheets of $3.1 billion and $3.2 billion as of March 31, 2011 and December 31, 2010, respectively.
(9)	The following line items: (a) Derivative liabilities at fair value; (b) Guaranty obligations; and (c) Other liabilities, consist of the following liabilities presented in our GAAP condensed consolidated balance sheets: (a) Accrued interest payable and (b) Other liabilities.
(10)	“Other liabilities” include the Accrued interest payable in our GAAP condensed consolidated balance sheets. The carrying value of this item in our GAAP condensed consolidated balance sheets totaled $13.8 billion as of both March 31, 2011 and December 31, 2010. We assume that certain other liabilities, such as deferred revenues, have no fair value. Although we report the “Reserve for guaranty losses” as part of “Other liabilities” in our GAAP condensed consolidated balance sheets, it is incorporated into and reported as part of the fair value of our guaranty obligations in our non-GAAP supplemental consolidated fair value balance sheets. “Other liabilities” in our GAAP condensed consolidated balance sheets include the following: (a) Derivative liabilities at fair value and (b) Guaranty obligations. The carrying value of these items totaled $1.7 billion and $2.5 billion as of March 31, 2011 and December 31, 2010, respectively.
(11)	The amount included in “estimated fair value” of the senior preferred stock is the liquidation preference, which is the same as the GAAP carrying value, and does not reflect fair value.

First-Quarter 2011 Results 12

EX-99.2

Exhibit 99.2

May 6, 2011 Fannie Mae 2011 First-Quarter Credit Supplement

This presentation includes information about Fannie Mae, including information contained in Fannie Mae's Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, the "2011 Q1 Form 10-Q." Some of the terms used in these materials are defined and discussed more fully in the 2011 Q1 Form 10-Q and in Fannie Mae's Form 10-K for the year ended December 31, 2010, the "2010 Form 10-K." These materials should be reviewed together with the 2011 Q1 Form 10-Q and the 2010 Form 10-K, copies of which are available on the "SEC Filings" page in the "Investors" section of Fannie Mae's Web site at www.fanniemae.com. Some of the information in this presentation is based upon information that we received from third-party sources such as sellers and servicers of mortgage loans. Although we generally consider this information reliable, we do not independently verify all reported information. This presentation includes forward-looking statements relating to future home price changes. These statements are based on our opinions, analyses, estimates, forecasts and other views on a variety of economic and other information, and changes in the assumptions and other information underlying these views could produce materially different results. The impact of future home price changes on our business, results or financial condition will depend on many other factors. Due to rounding, amounts reported in this presentation may not add to totals indicated (or 100%).

Table of Contents Slide Home Price Growth/Decline Rates in the U.S. 3 Home Price Declines Peak-to-Current (by State) as of 2011 Q1 4 Fannie Mae Acquisition Profile by Key Product Features 5 Fannie Mae Credit Profile by Key Product Features 6 Fannie Mae Credit Profile by Origination Year and Key Product Features 7 Fannie Mae Single-Family Cumulative Default Rates 8 Fannie Mae Credit Profile by State 9 Fannie Mae Single-Family Serious Delinquency Rates by State and Region 10 Home Price Growth/Decline and Fannie Mae Real Estate Owned (REO) in Selected States 11 Fannie Mae Alt-A Credit Profile by Key Product Features 12 Fannie Mae Alt-A Loans Versus Loans Underlying Private-Label Alt-A Securities 13 Fannie Mae Workouts by Type 14 Home Affordable Modification Program (HAMP) 15 Fannie Mae Modifications of Single-Family Delinquent Loans 16 Fannie Mae Multifamily Credit Profile by Loan Attributes 17 Fannie Mae Multifamily Credit Profile by Acquisition Year 18 Fannie Mae Multifamily Credit Profile by Region and State 19 Fannie Mae Multifamily Credit Profile by State 20

Home Price Growth/Decline Rates in the U.S. Note: Our estimates differ from the S&P/Case-Shiller index in two principal ways: (1) our estimates weight expectations for each individual property by number of properties, whereas the S&P/Case-Shiller index weights expectations of home price declines based on property value, causing declines in home prices on higher priced homes to have a greater effect on the overall result; and (2) our estimates attempt to exclude sales of foreclosed homes because we believe that differing maintenance practices and the forced nature of the sales make foreclosed home prices less representative of market values, whereas the S&P/Case-Shiller index includes sales of foreclosed homes. The S&P/Case Shiller comparison numbers shown above for the peak- to-trough forecast are calculated using our models and assumptions, but modified to account for weighting based on property value and the impact of foreclosed property sales. In addition to these differences, our estimates are based on our own internally available data combined with publicly available data, and are therefore based on data collected nationwide, whereas the S&P/Case-Shiller index is based on publicly available data, which may be limited in certain geographic areas of the country. Our comparative calculations to the S&P/Case- Shiller index provided above are not modified to account for this data pool difference. S&P/Case-Shiller Index 9.8% 7.7% 10.6% 10.7% 14.6% 14.7% -0.3% -8.4% -18.4% -2.4% -4.1% Fannie Mae Home Price Index Growth rates are from period-end to period-end. *Year-to-date as of the first quarter of 2011. Initial estimate based on purchase transactions in Fannie-Freddie acquisition and public deed data available through the end of March 2011, supplemented by preliminary data available for transactions to be closed in April and May 2011. Including subsequent data may lead to materially different results. We expect peak-to-trough declines in home prices to be in the 22% to 29% range (comparable to a decline in the 32% to 40% range using the S&P/Case-Shiller index method).

Top %: State/Region Home Price Decline Rate percentage from applicable peak in that state through March 31, 2011 Bottom %: Percent of Fannie Mae single-family conventional guaranty book of business by unpaid principal balance as of March 31, 2011 Note: Regional home price decline percentages are a housing stock unit-weighted average of home price decline percentages of states within each region. * Source: Fannie Mae. Initial estimate based on purchase transactions in Fannie-Freddie acquisition and public deed data available through the end of March 2011, supplemented by preliminary data available for transactions to be closed in April and May 2011. Including subsequent data may lead to materially different results. Home Price Change Peak-to-Current as of 2011 Q1*

Fannie Mae Acquisition Profile by Key Product Features Credit Characteristics of Single-Family Business Volume (1) Percentage calculated based on unpaid principal balance of loans at time of acquisition. Single-family business volume refers to both single-family mortgage loans we purchased for our mortgage portfolio and single-family mortgage loans we securitized into Fannie Mae MBS. The increase for 2010 and 2011 is the result of our Refi PlusTM initiative, which involves the refinance of existing Fannie Mae loans with loan-to-value ratios up to 125%. Refi Plus and Home Affordable Refinance Program (HARP) started in April 2009. FICO Credit scores as reported by the seller of the mortgage loan at the time of delivery. Represented as a percentage of total unpaid principal balance of loans at time of acquisition. Primarily represents the refinance of existing Fannie Mae loans through Refi Plus.

Fannie Mae Credit Profile by Key Product Features Credit Characteristics of Single-Family Conventional Guaranty Book of Business Loans with multiple product features are included in all applicable categories. The subtotal is calculated by counting a loan only once even if it is included in multiple categories. Excludes non-Fannie Mae securities held in portfolio and those Alt-A and subprime wraps for which Fannie Mae does not have loan-level information. Fannie Mae had access to detailed loan-level information for over 99% of its single-family conventional guaranty book of business as of March 31, 2011. FICO Credit scores as reported by the seller of the mortgage loan at the time of delivery. Unpaid principal balance of all loans with credit enhancement as a percentage of unpaid principal balance of single-family conventional guaranty book of business for which Fannie Mae had access to loan level information. Includes primary mortgage insurance, pool insurance, lender recourse and other credit enhancement. Expressed as a percentage of credit losses for the single-family guaranty book of business. For information on total credit losses, refer to Fannie Mae's 2011 Q1 Form 10-Q.

Fannie Mae Credit Profile by Origination Year and Key Product Features Credit Characteristics of Single-Family Conventional Guaranty Book of Business by Origination Year Excludes non-Fannie Mae securities held in portfolio and those Alt-A and subprime wraps for which Fannie Mae does not have loan-level information. Fannie Mae had access to detailed loan- level information for over 99% of its single-family conventional guaranty book of business as of March 31, 2011. The increase for 2010 and 2011 is the result of our Refi Plus loans, which started in April 2009, and involve the refinance of existing Fannie Mae loans with loan-to-value ratios up to 125%. FICO Credit scores as reported by the seller of the mortgage loan at the time of delivery. Unpaid principal balance of all loans with credit enhancement as a percentage of unpaid principal balance of single-family conventional guaranty book of business for which Fannie Mae has access to loan-level information. Includes primary mortgage insurance, pool insurance, lender recourse and other credit enhancement. Expressed as a percentage of credit losses for the single-family guaranty book of business. For information on total credit losses, refer to Fannie Mae's 2011 Q1 Form 10-Q. Defaults include loan liquidations other than through voluntary pay-off or repurchase by lenders and include loan foreclosures, preforeclosure sales, sales to third parties and deeds in lieu of foreclosure. Cumulative Default Rate is the total number of single-family conventional loans in the guaranty book of business originated in the identified year that have defaulted, divided by the total number of single-family conventional loans in the guaranty book of business originated in the identified year. For 2000 to 2004 cumulative default rates, refer to slide 8.

Note: Defaults include loan liquidations other than through voluntary pay-off or repurchase by lenders and include loan foreclosures, preforeclosure sales, sales to third parties and deeds in lieu of foreclosure. Cumulative Default Rate is the total number of single-family conventional loans in the guaranty book of business originated in the identified year that have defaulted, divided by the total number of single-family conventional loans in the guaranty book of business originated in the identified year. Data as of March 31, 2011 are not necessarily indicative of the ultimate performance of the loans and performance is likely to change, perhaps materially, in future periods. Fannie Mae Single-Family Cumulative Default Rates Cumulative Default Rates of Single-Family Conventional Guaranty Book of Business by Origination Year

Fannie Mae Credit Profile by State Credit Characteristics of Single-Family Conventional Guaranty Book of Business by State Excludes non-Fannie Mae securities held in portfolio and those Alt-A and subprime wraps for which Fannie Mae does not have loan-level information. Fannie Mae had access to detailed loan-level information for over 99% of its single-family conventional guaranty book of business as of March 31, 2011. FICO Credit scores as reported by the seller of the mortgage loan at the time of delivery. Unpaid principal balance of all loans with credit enhancement as a percentage of unpaid principal balance of single-family conventional guaranty book of business for which Fannie Mae has access to loan-level information. Includes primary mortgage insurance, pool insurance, lender recourse and other credit enhancement. Expressed as a percentage of credit losses for the single-family guaranty book of business. For information on total credit losses, refer to Fannie Mae's 2011 Q1 Form 10-Q. Select Midwest states are Illinois, Indiana, Michigan and Ohio.

Fannie Mae Single-Family Serious Delinquency Rates by State and Region (1) Calculated based on the number of loans in Fannie Mae's single-family conventional guaranty book of business within each specified category. Select Midwest states are Illinois, Indiana, Michigan and Ohio. For information on which states are included in each region, refer to footnote 9 to Table 34 in Fannie Mae's 2011 Q1 Form 10-Q. Select Midwest States (2) Southwest

Home Price Growth/Decline and Fannie Mae Real Estate Owned (REO) in Selected States Based on Fannie Mae Home Price Index. Initial estimate based on purchase transactions in Fannie-Freddie acquisition and public deed data available through the end of March 2011, supplemented by preliminary data available for transactions to be closed in April and May 2011. Including subsequent data may lead to materially different results. Select Midwest states are Illinois, Indiana, Michigan and Ohio.

Fannie Mae Alt-A Credit Profile by Key Product Features Credit Characteristics of Alt-A Single-Family Conventional Guaranty Book of Business by Origination Year "Alt-A mortgage loan" generally refers to a mortgage loan that can be underwritten with reduced or alternative documentation than that required for a full documentation mortgage loan but may also include other alternative product features. In reporting our Alt-A exposure, we have classified mortgage loans as Alt-A if the lenders that deliver the mortgage loans to us have classified the loans as Alt-A based on documentation or other product features. We have classified private-label mortgage-related securities held in our investment portfolio as Alt-A if the securities were labeled as such when issued. Newly originated Alt-A loans acquired in 2009, 2010, and 2011 consist of the refinance of existing loans under our Refi Plus Initiative. Excludes non-Fannie Mae securities held in portfolio and those Alt-A and subprime wraps for which Fannie Mae does not have loan-level information. Fannie Mae had access to detailed loan-level information for over 99% of its single-family conventional guaranty book of business as of March 31, 2011. The increase for 2009, 2010, and 2011 is the result of Refi Plus loans, which started in April 2009 and can have loan-to-value ratios up to 125%. FICO Credit scores as reported by the seller of the mortgage loan at the time of delivery. Defined as unpaid principal balance of Alt-A loans with credit enhancement as a percentage of unpaid principal balance of all Alt-A loans. At March 31, 2011,10.2% of unpaid principal balance of Alt-A loans carried only primary mortgage insurance (no deductible), 6.4% had only pool insurance (which is generally subject to a deductible), 1.2% had primary mortgage insurance and pool insurance, and 0.4% carried other credit enhancement such as lender recourse. Expressed as a percentage of credit losses for the single-family guaranty book of business. For information on total credit losses, refer to Fannie Mae's 2011 Q1 Form 10-Q. Defaults include loan liquidations other than through voluntary pay-off or repurchase by lenders and includes loan foreclosures, preforeclosure sales, sales to third parties and deeds in lieu of foreclosure. Cumulative Default Rate is the total number of single-family conventional loans in the guaranty book of business originated in the identified year that have defaulted, divided by the total number of single-family conventional loans in the guaranty book of business originated in the identified year.

Fannie Mae Alt-A Loans Versus Loans Underlying Private-Label Alt-A Securities Data as of February 2011 are not necessarily indicative of the ultimate performance of the loans and performance is likely to change, perhaps materially, in future periods. Note: Private-label securities data source: CoreLogic/LoanPerformance data, which estimates it captures 97% of Alt-A private-label securities. Includes first liens and any subordinate liens present at origination. The Cumulative Default Rate is based upon the number of months between the loan origination month/year and default month/year. Due to low amount of Alt-A loans originated in 2008, 2009 and 2010, no comparable data has been provided for these years.

Fannie Mae Completed Workouts by Type Modifications involve changes to the original mortgage loan terms, which may include a change to the product type, interest rate, amortization term, maturity date and/or unpaid principal balance. Modifications include completed modifications made under the Administration's Home Affordable Modification Program, which was implemented in March 2009, but do not reflect loans currently in trial modifications. Information on Fannie Mae loans under the Home Affordable Modification Program is provided on Slide 15. Repayment plans involve plans to repay past due principal and interest over a reasonable period of time through temporarily higher monthly payments. Loans with completed repayment plans are included for loans that were at least 60 days delinquent at initiation. Forbearances involve an agreement to suspend or reduce borrower payments for a period of time. Loans with forbearance plans are included for loans that were at least 90 days delinquent at initiation. Deeds in lieu of foreclosure involve the borrower's voluntarily signing over title to the property. In a preforeclosure sale, the borrower, working with the servicer, sells the home prior to foreclosure to pay off all or part of the outstanding loan, accrued interest and other expenses from the sale proceeds. HomeSaver Advance TM are unsecured, personal loans designed to help qualified borrowers bring their delinquent mortgage loans current after a temporary financial difficulty. The Program was retired on September 30, 2010. TM

Provides immediate payment relief to borrowers who are delinquent or in imminent risk of payment default. We require servicers to first evaluate all Fannie Mae problem loans for HAMP eligibility. If a borrower is not eligible for HAMP, our servicers are required to exhaust all other workout alternatives before proceeding to foreclosure. Home Affordable Modification Program (HAMP) Data Source: United States Treasury Department as reported by servicers to the system of record for the Home Affordable Modification Program. Fannie Mae Loans Under HAMP Active Permanent HAMP modifications exclude modifications on loans that subsequently canceled because the loans were 90+ days delinquent or have paid off. Re-performance rates for modified single-family loans, including permanent HAMP modifications, are presented on Slide 16.

Fannie Mae Modifications of Single-Family Delinquent Loans Change in Monthly Principal and Interest Payment of Modified Single-Family Loans(1)(2) Re-performance Rates of Modified Single-Family Loans(1) Excludes loans that were classified as subprime adjustable rate mortgages that were modified into fixed rate mortgages and were current at the time of modification. Modifications include permanent modifications, but do not reflect loans currently in trial modifications. Represents the change in the monthly principal and interest payment at the effective date of the modification. The monthly principal and interest payment on modified loans may vary, and may increase, during the remaining life of the loan. Includes loans that paid off.

Fannie Mae Multifamily Credit Profile by Loan Attributes Excludes loans that have been defeased. Defeasance is prepayment of a loan through substitution of collateral. We classify multifamily loans as seriously delinquent when payment is 60 days or more past due. Weighted Average Original loan-to-value ratio is 66% as of March 31, 2011. Under the Delegated Underwriting and Servicing, or DUS (r), product line, Fannie Mae purchases individual, newly originated mortgages from specially approved DUS lenders using DUS underwriting standards and/or DUS loan documents. Because DUS lenders generally share the risk of loss with Fannie Mae, they are able to originate, underwrite, close and service most loans without our pre-review. Multifamily loans under $3 million and up to $5 million in high income areas.

Fannie Mae Multifamily Credit Profile by Acquisition Year Excludes loans that have been defeased. Defeasance is prepayment of a loan through substitution of collateral. We classify multifamily loans as seriously delinquent when payment is 60 days or more past due. Cumulative Defaults by Acquisition Year Multifamily SDQ Rate by Acquisition Year

Fannie Mae Multifamily Credit Profile by Region and State Excludes loans that have been defeased. Defeasance is prepayment of a loan through substitution of collateral. We classify multifamily loans as seriously delinquent when payment is 60 days or more past due. For information on which states are included in each region, refer to Fannie Mae's 2011 Q1 Form 10-Q. Asset Class Definitions: Conventional/Co-Op Housing: Privately owned multifamily properties or multifamily properties in which the residents collectively own the property through their shares in the cooperative corporation. Seniors Housing: Multifamily rental properties for senior citizens. Manufactured Housing: A residential real estate development consisting of housing sites for manufactured homes, related amenities, utility services, landscaping, roads and other infrastructure. Student Housing: Multifamily rental properties in which 80% or more of the units are leased to undergraduate and/or graduate students. The Multifamily Affordable Business Channel focuses on financing properties which are under a regulatory agreement that provides long-term affordability, such as properties with rent subsidies or income restrictions.

Example: UPB in New York is greater than $10B and 2011 Q1 Credit Losses were $1M Portfolio UPB(1) Concentration by State as of 03/31/2011 Fannie Mae Multifamily Credit Profile by State Numbers: Represent 2011 Q1 credit losses for each state which total $82M as of March 31, 2011. States with no numbers had less than $1 million in credit losses in Q1 2011. Shading: Represent Unpaid Principal Balance (UPB) for each state which total $188B as of March 31, 2011. Excludes loans that have been defeased. Defeasance is prepayment of a loan through substitution of collateral.