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News Release
February 10, 2010
Fannie Mae to Purchase Delinquent Loans from Single-Family MBS Trusts

WASHINGTON, DC — Fannie Mae announced today it intends to increase significantly its purchases of delinquent loans from single-family MBS trusts. Under our single-family MBS trust documents, Fannie Mae has the option to purchase from its MBS trusts loans that are delinquent as to four or more consecutive monthly payments.

The delinquent loan purchases will help Fannie Mae preserve capital by reducing net funding costs and will thereby reduce the amount of additional draws from the U.S. Department of the Treasury. The purchases will not affect Fannie Mae's foreclosure prevention activities including our important work under the Making Home Affordable Program.

The company will begin to purchase these loans in March 2010, with the first purchases being reflected in the MBS pool factors released on the fourth business day of April 2010. We expect to purchase a significant portion of the current delinquent population within a few month period subject to market, servicer capacity, and other constraints.

On January 1, 2010, Fannie Mae adopted new accounting standards for transfers of financial assets and the consolidation of variable interest entities - SFAS 166 and SFAS 167. As a result, the cost of purchasing most delinquent loans from MBS and holding them in portfolio will be less than the cost of advancing delinquent payments to security holders. Fannie Mae will continue to review the economics of purchasing loans that are four or more months delinquent in the future and may reevaluate its delinquent loan purchase practices and alter them if circumstances warrant.

As of December 31, 2009, the total dollar volume of all four or more month delinquent loans in single-family MBS trusts was approximately $127 billion. Of that amount, approximately $82 billion backed outstanding 30-year, single-family amortizing fixed-rate MBS (CL-prefix). We are providing below a table showing in those CL pools the scheduled unpaid principal balances of loans that were delinquent with respect to four or more full consecutive monthly payments along with these delinquencies as a percentage of scheduled unpaid principal balances. The information below is categorized by MBS pass-through rates with corresponding vintage information (year of MBS issuance). Fannie Mae had approximately $45 billion of four or more months delinquent loans in non-CL prefix MBS. We will provide the market with additional information on these securities within the next two weeks.

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Certain statements in this news release may be considered forward-looking statements within the meaning of the federal securities laws. A description of factors that may cause actual results to differ materially from the expectations in these and other forward-looking statements can be found in our Annual Report on Form 10-K for the year ended December 31, 2008 and our reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investors page of our Web site at www.fanniemae.com and the SEC's Web site at www.sec.gov.

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.

Fannie Mae Resource Center Telephone 1-800-7FANNIE
(1-800-732-6643)