With HUD's designation of high-cost areas as directed by the economic stimulus package passed into law earlier this year, Fannie Mae will begin temporarily purchasing loans beyond the company's prevailing conventional loan limit in the designated areas. The company may purchase loans with a maximum original principal obligation of up to 125 percent of the area median home price in high-cost areas, not to exceed $729,750 except in Alaska, Hawaii, Guam and the U.S. Virgin Islands where higher limits may apply.

The company will only purchase jumbo-conforming mortgages that are originated from July 1, 2007 through December 31, 2008, and that are secured by one-unit properties. We will assist our lender customers with implementation by providing reference materials including an online loan limit reference tool and guidance on our loan limits based on a property's geography, both of which are expected to be available on April 1, 2008.

The company is working closely with its regulators, OFHEO and HUD, in implementing procedures to address the temporary increase in the prevailing conventional loan limit. We continue to support the increase as a constructive effort to help address the ongoing credit crunch and believe it is in keeping with our core mission to provide liquidity, stability and affordability to the mortgage markets.

For additional information, please see Announcement 08-05, "Temporary Increase to Our Conventional Loan Limits" at www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0805.pdf.

Contact: 202-752-6720