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Pricing Supplement Dated July 10, 2003

(To Offering Circular dated January 23, 2003)

Callable Benchmark Notes^®

This Pricing Supplement relates to the Debt Securities described below (the "Notes"). You should read it together with the Offering Circular dated January 23, 2003 (the "Offering Circular"), relating to the Universal Debt Facility of the Federal National Mortgage Association ("Fannie Mae"). Unless defined below, capitalized terms have the meanings we gave to them in the Offering Circular.

The Notes, and interest thereon, are not guaranteed by the United States and do not constitute a debt or obligation of the United States or of any agency or instrumentality thereof other than Fannie Mae.

Certain Securities Terms

1. Title: 4.375% Notes Due July 17, 2013

2. Form: Fed Book-Entry Securities

3. Specified Payment Currency

a. Interest: U.S. dollars

b. Principal: U.S. dollars

4. Aggregate Original Principal Amount: $2,000,000,000.00

5. Issue Date: July 14, 2003

6. Maturity Date: July 17, 2013

Amount Payable on the Maturity Date: 100.00% of principal amount

7. Subject to Redemption Prior to Maturity Date

__ No

X Yes; in whole or in part, at our option, on July 17, 2006 at a redemption price of 100% of the principal amount redeemed, plus accrued interest thereon to the date of redemption

______________
"Callable Benchmark Notes" is a registered trademark of Fannie Mae.

8. Interest Category: Fixed Rate Securities

9. Interest

a. Frequency of Interest Payments: semiannually

b. Interest Payment Dates: the 17th day of each January and July

c. First Interest Payment Date: January 17, 2004

d. Interest rate per annum: 4.375%

Additional Information Relating to the Notes

1. Identification Number(s)

a. CUSIP: 31359MSL8

b. ISIN: US31359MSL80

c. Common Code: 017279947

2. Listing Application

__ No

X Yes: Luxembourg Stock Exchange

3. Eligibility for Stripping on the Issue Date

___ No

X Yes

___ Minimum Principal Amount: $320,000

Offering

1. Pricing Date: July 10, 2003

2. Method of Distribution: X Principal __ Non-underwritten

3. Dealers Underwriting Commitment

Bear, Stearns & Co. Inc. $ 475,000,000

Deutsche Bank Securities Inc. 475,000,000

Morgan Stanley & Co. Incorporated 475,000,000

Credit Suisse First Boston LLC 50,000,000

First Tennessee Bank National Association 75,000,000

Goldman, Sachs & Co. 50,000,000

HSBC Securities (USA) Inc. 50,000,000

J.P. Morgan Securities Inc. 50,000,000

Lehman Brothers Inc. 50,000,000

Merrill Lynch Government Securities, Inc. 50,000,000

Citigroup Global Markets Inc. 50,000,000

UBS Securities LLC 150,000,000

Total $2,000,000,000

a. Representative(s): Bear, Stearns & Co. Inc.
Deutsche Bank Securities Inc.
Morgan Stanley & Co. Incorporated

b. Stabilizing Manager: Morgan Stanley & Co. Incorporated

4. Offering Price:

X Fixed Offering Price: 99.639% of principal amount, plus accrued interest, if any, from the Settlement Date

__ Variable Price Offering

5. Dealer Purchase Price: 99.414% of principal amount

a. Concession: 0.09%

b. Reallowance: N/A

6. Pricing Methodology: See Annex 1

7. Supplemental Plan of Distribution: See Annex 2

Settlement

1. Settlement Date: July 14, 2003

2. Settlement Basis: delivery versus payment

3. Settlement Clearing System: U.S. Federal Reserve Banks

United States Taxation

We have engaged Dewey Ballantine LLP as special tax counsel to review the discussion in the Offering Circular under the heading "United States Taxation." They have given us their written legal opinion that the discussion correctly describes the principal aspects of the United States federal tax treatment of investors who purchase the Notes described in the Offering Circular. The discussion in the Offering Circular is a general discussion that may not apply to your particular circumstances.

ANNEX 1
TO PRICING SUPPLEMENT DATED JULY 10, 2003
RELATING TO: 4.375% Notes Due July 17, 2013

Pricing Methodology

We have determined the offering price of the Notes using a valuation methodology applied to a yield curve of selected Fannie Mae noncallable Benchmark Securities (the “Curve”). The Curve is adjusted with a set of constant maturity yield adjustment spreads derived from Fannie Mae's Constant Maturity Debt Index ("CMDI"). The methodology also incorporates European swaption volatility levels provided by Tullett & Tokyo on the TTKL interest rate swaption volatility data series found on the Bloomberg PROFESSIONAL service.

The maturities defining the Curve are 3-months, 6-months, 1-year, 2-years, 3-years, 4-years, 5-years, 7-years, 10-years, 20-years and 30-years. In consultation with our Callable Benchmark Notes Dealers, we define which outstanding noncallable Benchmark Security should represent each maturity point on the Curve. We expect that the 2-year, 3-year, 4-year, 5-year, 7-year, 10-year and 30-year values will be fed directly by TradeWeb LLC to Bloomberg. The 20-year maturity point is a straight line interpolation calculated by Bloomberg between the 10-year and 30-year maturity points. Since our short-term securities are not included on TradeWeb, at least once per
day, we expect to supply to Bloomberg a set of 3-month, 6-month and 1-year funding spreads that will be used in the generation of the Curve. We expect that the list of current Benchmark Securities and the 3-month, 6-month and 1-year spreads used in constructing the Curve will be accessible on Bloomberg.

The valuation methodology is expected to be available on Bloomberg to investors, dealers and other market participants for use in valuation analysis and secondary market trading of the Notes. The CMDI is available on Bloomberg, Moneyline Telerate and Reuters.

Although TradeWeb, Tullett & Tokyo and Bloomberg provide the information described above, they are under no obligation to provide or continue to provide such information. Neither Fannie Mae nor the Dealers will have any responsibility for the information provided by TradeWeb, Tullett & Tokyo or Bloomberg.

ANNEX 2
TO PRICING SUPPLEMENT DATED JULY 10, 2003
RELATING TO: 4.375% Notes Due July 17, 2013

SUPPLEMENTAL PLAN OF DISTRIBUTION

We will sell $2,000,000,000 principal amount of the Notes to the Dealers listed under “Offering” in this Pricing Supplement at the Dealer Purchase Price specified in this Pricing Supplement. In addition, to facilitate secondary market transactions, from time to time we may sell up to $500,000,000 principal amount of the Notes (the “Additional Notes”) in connection with agreements by Fannie Mae to repurchase the Additional Notes. The Additional Notes will be held in an account at the Federal Reserve Bank of New York. It is expected that the Additional Notes will be available for sale to approved dealers through a multiple price auction process. We expect that the results of each auction will be posted as soon as possible following the completion of each auction on Bloomberg, Moneyline Telerate and Reuters. We may discontinue sales of Additional Notes at any time without notice.

This Pricing Supplement may also be used in connection with the issuance by Fannie Mae of any Additional Notes.