Fannie Mae Redemption

WASHINGTON, July 12, 2011 -

Fannie Mae (OTC Bulletin Board: FNMA)
will redeem the principal amounts indicated for the following
securities issues on the redemption dates indicated below at a
redemption price equal to 100 percent of the principal amount
redeemed, plus accrued interest thereon to the date of
redemption:

      Principal  Security Interest
       Amount      Type    Rate      Maturity Date    CUSIP   Redemption Date
     $50,000,000   MTN    2.500%   January 22, 2016 3136FMS47  July 22, 2011
    $325,000,000   MTN    2.250%     July 22, 2015  31398AX64  July 22, 2011

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.

This press release
does not constitute an offer to sell or the solicitation of an
offer to buy securities of Fannie Mae. Nothing in this press
release constitutes advice on the merits of buying or selling a
particular investment. Any investment decision as to any purchase
of securities referred to herein must be made solely on the basis
of information contained in Fannie Mae’s applicable Offering
Circular, and that no reliance may be placed on the completeness or
accuracy of the information contained in this press release.

You should not deal
in securities unless you understand their nature and the extent of
your exposure to risk. You should be satisfied that they are
suitable for you in light of your circumstances and financial
position. If you are in any doubt you should consult an
appropriately qualified financial advisor.

Katherine Constantinou, +1-202-752-5403