2011 Marks Move From Fragile Recovery to Firmer Expansion According to Fannie Mae's Economics & Mortgage Market Analysis Group

Housing Activity Expected to Begin Recovery in 2011; Home Prices Likely to Lag

WASHINGTON, January 18, 2011 - Thanks to strengthening in consumer spending and growing policy clarity
at the end of 2010, the economy is finally poised to accelerate and sustain
above-par, less volatile growth, according to the January 2011 Economic
Outlook released today by Fannie Mae's (OTC Bulletin Board: FNMA) Economics &
Mortgage Market Analysis Group. The economy is expected to grow by 3.6
percent in 2011, compared to an estimated 2.8 percent in 2010. The group
expects some increase in housing activity during 2011, however, a
growth-oriented view of housing is not expected until 2012.

"The economy has regained momentum entering 2011 and we see significant
improvement in the economy's ability to grow compared to 2010," said Fannie
Mae Chief Economist Doug Duncan. "We expect a small rise in home sales this
year, but significant amounts of supply and shadow inventory of expected
foreclosures will continue to hamper a robust housing picture for some time."

For an audio synopsis of the January 2011 Economic Outlook, listen to the
podcast on the Economics & Mortgage Market Analysis
(www.fanniemae.com/media/economics/index.jhtml?p=Media&s=Economics+%26+Mortgage+Market+Analysis)
site at www.fanniemae.com. Visit the site to read the full January
2011 Economic Outlook, including the Economic Developments Commentary,
Economic Forecast, and Housing Forecast.

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's
Economics & Mortgage Market Analysis (EMMA) group included in these materials
should not be construed as indicating Fannie Mae's business prospects or
expected results, are based on a number of assumptions, and are subject to
change without notice. How this information affects Fannie Mae will depend on
many factors. Although the EMMA group bases its opinions, analyses,
estimates, forecasts, and other views on information it considers reliable,
it does not guarantee that the information provided in these materials is
accurate, current, or suitable for any particular purpose. Changes in the
assumptions or the information underlying these views could produce
materially different results. The analyses, opinions, estimates, forecasts,
and other views published by the EMMA group represent the views of that group
as of the date indicated and do not necessarily represent the views of Fannie
Mae or its management.

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.

Pete Bakel of Fannie Mae, +1-202-752-2034