This Supplement supplements the Pricing Supplement dated July 23, 2003, and 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 offered by this Supplement, when issued, will form a single issue with the $4,000,000,000.00 aggregate principal amount of such Notes (the "Outstanding Notes") that we issued in one or more prior transactions. With the exception of the terms set forth below, the Notes will have the terms set forth in the Pricing Supplement dated July 23, 2003, a copy of which is attached.

The Notes, together with 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: 3.25% Notes Due August 15, 2008

2.

Aggregate Principal Amount: $2,000,000,000.00 ($6,000,000,000.00 aggregate principal amount outstanding when combined with the Outstanding Notes)

3.

Issue Date: September 26, 2003

4.

Interest

a.

Interest Commencement Date: August 15, 2003

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

Offering

1.

Pricing Date:

September 24, 2003

2.

Method of Distribution:

X Principal

__ Non-underwritten

3.

Dealers

Underwriting Commitment

Citigroup Global Markets Inc.

$ 568,000,000

Merrill Lynch, Pierce, Fenner & Smith Incorporated

566,000,000

Morgan Stanley & Co. Incorporated

566,000,000

Bear, Stearns & Co. Inc.

30,000,000

Blaylock & Partners, L.P.

30,000,000

Credit Suisse First Boston LLC

30,000,000

Deutsche Bank Securities Inc.

30,000,000

First Tennessee Bank National Association

30,000,000

Goldman, Sachs & Co.

30,000,000

HSBC Securities (USA) Inc.

30,000,000

J.P. Morgan Securities Inc.

30,000,000

Lehman Brothers Inc.

30,000,000

UBS Securities LLC

30,000,000

Total

$2,000,000,000

a.

Representative(s):

Citigroup Global Markets Inc. Merrill Lynch, Pierce, Fenner & Smith Incorporated Morgan Stanley & Co. Incorporated

b.

Stabilizing Manager:

Citigroup Global Markets Inc.

4.

Offering Price:

X

Fixed Offering Price: 99.259% of principal amount, plus accrued interest from August 15, 2003

__

Variable Price Offering

5.

Dealer Purchase Price: 99.159% of principal amount, plus accrued interest from August 15, 2003

a.

Concession:

0.08%

b.

Reallowance:

N/A

6.  Supplemental Plan of Distribution:  See Annex 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Settlement

1.

Settlement Date:

September 26, 2003

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 Supplement Dated September 24, 2003

To Pricing Supplement Dated July 23, 2003

Issue: 3.25% Notes Due August 15, 2008

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.