Fannie Mae adjusts dividend rate for preferred stock series O

The new dividend rate for Series O will be in effect from and including September 30, 2007 to but excluding December 31, 2007. In accordance with the terms of the Series O Preferred Stock Certificate of Designation, the dividend will continue to accrue at a per annum rate of 7.000 per cent until it is determined that the sum of the 10-year CMT rate plus 2.375 per cent is greater than 7.000 per cent on the applicable quarterly determination date. Fannie Mae will only announce additional dividend changes to Series O if the quarterly dividend rate for the quarterly dividend period is greater than 7.000 per cent.