Fannie Mae Redemption

WASHINGTON, August 26, 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  Maturity Date     CUSIP   Redemption Date
       Amount    Type     Rate
    $400,000,000  MTN    1.750%  March 7, 2014    3135G0AX1 September 7, 2011
     $50,000,000  MTN    1.375% December 7, 2015  3136FPC47 September 7, 2011
     $75,000,000  MTN    0.650% September 7, 2012 3136FPDF1 September 7, 2011
    $150,000,000  MTN    2.500%  March 7, 2014    3136FRBY8 September 7, 2011
     $75,000,000  MTN    3.250%  March 7, 2016    3136FRCT8 September 7, 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.

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