31359MEE9

PRICING SUPPLEMENT DATED OCTOBER 9, 1998

(To Offering Circular dated January 6, 1997 and Supplement thereto dated August 12, 1997)

FANNIE MAE Global Debt Facility

This Pricing Supplement relates to the Debt Securities described below. You should read it together with the Offering Circular dated January 6, 1997 and a Supplement thereto dated August 12, 1997 (collectively, the "Offering Circular") relating to the Global Debt Facility of the Federal National Mortgage Association ("Fannie Mae" or the "Corporation"). Capitalized terms used in this Pricing Supplement have the meanings we gave to them in the Offering Circular, unless we specify otherwise.

THE DEBT SECURITIES, 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 THE CORPORATION.

Certain Securities Terms

1. Title: 5.375% Notes Due December 7, 2028

2. Form

¨ Book-Entry

x Global

x DTC Global Securities

¨ Other Global Securities

3. Specified Payment Currency*

a. Interest: British pounds sterling

b. Principal: British pounds sterling

4. Aggregate Original Principal Amount: STG 150,000,000

5. Issue Date: October 16, 1998

6. Maturity Date: December 7, 2028

*See Annex 1 attached hereto regarding redenomination rights of the Corporation.

a. Amount Payable on the Maturity Date

x Fixed Principal Repayment Amount

x 100% of principal amount

o ___% of principal amount

o Variable Principal Repayment 7. Subject to Redemption Prior to Maturity Date

x No

o Yes

8. Interest Category

x Fixed Rate Securities

o Step Rate Securities

o Variable Rate Securities

o Fixed/Variable Rate Securities

o Zero-Coupon Securities

9. Interest

a. Frequency of Interest Payments

o Annually

x Semiannually

o Quarterly

o Monthly

o Other: ____________

b. Interest Payment Dates: June 7 and December 7 of each year, commencing December 7, 1998

c. Interest rate per annum: 5.375%

d. Accrual Method:

Interest will be calculated on the basis of the actual number of days elapsed in a year of 365 days, regardless of whether accrual or payment occurs in a leap year.

The foregoing replaces and supersedes the second sentence under "Description of the Debt Securities - Interest - Fixed Rate Securities" in the Offering Circular.

10. Authorized Denominations (if other than minimum denominations of U.S. $10,000 and additional increments of U.S. $5,000) a. Minimum Denominations: STG 1,000

b. Additional Increments: STG 1,000

Additional Information Relating to the Securities

1. Identification Number(s)

a. CUSIP: 31359MEE9

b. ISIN: US31359MEE93

c. Common Code: 9157077

d. Other: _______

2. Listing Application

o No

x Yes

x Luxembourg 3. Currency Exchange Bank

x The Chase Manhattan Bank

4. Paying Agent: The Chase Manhattan Bank, London, if and so long as there are Definitive Securities outstanding under these Notes.

5. Additional Tax Information: See Annex 2

6. Business Day: The following replaces and supersedes clause (ii) of the definition of "Business Day" under "Description of the Debt Securities - Provisions Relating to all Debt Securities - Business Day Convention" in the Offering Circular:

(ii) with respect to Global Securities, any day other than (a) a Saturday, (b) a Sunday, (c) a day on which banking institutions are required or permitted by law or governmental action to close in (1) New York, New York (in the case of any Specified Payment Currency) or (2) the Principal Financial Center of the country of the government issuing a Specified Payment Currency (in the case where the Specified Payment Currency is other than U.S. dollars or ECU), (d) if the Specified Payment Currency is ECU, a day which appears as an ECU non-settlement day on the display designated as "ISDE" on the Reuter Monitor Money Rates Service (or such other page selected by the Calculation Agent as may replace such page on such service, or such other service selected by the Calculation Agent as may replace such service, for the purpose of displaying information related to ECU non-settlement days) (or a day so designated by the ECU Banking Association) or, if ECU non-settlement days do not appear on that page (and are not so designated), a day on which payments in ECU cannot be settled in the international interbank market as determined by the Global Agent or (e) with respect to any required payment, a day on which banking institutions are required or permitted by law or governmental action to close in the place of payment.

Offering

1. Pricing Date: October 6, 1998

2. Method of Distribution: x Principal ¨ Agent

3. Applicable Dealer Underwriting Commitment

Merrill Lynch International STG 150,000,000

4. Offering Price:

x Fixed Offering Price: 99.489%, plus accrued interest, if any, from Issue Date

¨ Variable Price Offering

5. Purchase Price to Applicable Dealer: 99.039% of Principal Amount, plus accrued interest, if any, from Issue Date a. Concession: .15%

b. Reallowance: N/A

Settlement

1. Settlement Date: October 16, 1998, 9:00 a.m., New York City time

2. Settlement Basis

¨ Delivery versus payment

x Free delivery

3. Settlement Clearing System

¨ U.S. Federal Reserve Banks

x DTC

¨ Euroclear

¨ Cedel

¨ Other: _____________

ANNEX 1

TO PRICING SUPPLEMENT DATED OCTOBER 9, 1998

RELATING TO:

Issue (Title): 5.375% Notes Due December 7, 2028

REDENOMINATION INTO EURO

This Annex describes the right of the Corporation to change the currency in which the Debt Securities are denominated and payable. The Corporation may elect to change such currency from the original Specified Payment Currency to euro upon the conditions set forth in this Annex. Such conditions permit the Corporation to change such currency to euro without the consent of any Holders or beneficial owners of the Debt Securities. This Annex also describes certain consequences of such change from the original Specified Payment Currency to euro and provides background information on the euro. Such change in the currency from the original Specified Payment Currency to euro is referred to in this Annex as a "redenomination" of the Debt Securities.

Definitions

As used in this Annex, the following defined terms will have the meanings specified in this definitional section. Other capitalized terms defined in the body of this Annex will have the meanings given to them in the other sections of this Annex. Capitalized terms used in this Annex and not otherwise defined in this Annex will have the meanings given to them in the Offering Circular.

"cent" means the sub-unit of the euro (which is equal to 1/100 of a euro).

"EMU" means European economic and monetary union as contemplated in the Treaty.

"EMU Date" means the date on which the third stage of EMU starts, as contemplated by the Treaty.

"euro(s)" means the currency to be introduced at the start of the third stage of EMU pursuant to the Treaty. If the country that issued the original Specified Payment Currency becomes a Participating Member State, euros eventually will replace such original Specified Payment Currency as the currency of such Participating Member State.

"Fixed Conversion Rate" means the fixed rate for the conversion of the Specified Payment Currency into euro established by the Council of the European Union pursuant to Article 109l(4) of the Treaty.

"Participating Member State" means a member state of the European Union that adopts the euro as its single currency in accordance with the Treaty on or after the EMU Date. Currently, the United Kingdom is not a Participating Member State.

"Selected Redenomination Date" means the Interest Payment Date that is specified in the Redenomination Notice as the date on which redenomination of the Debt Securities will occur. The Selected Redenomination Date can occur only on or after the later of (i) the EMU Date and (ii) the date the country that issued the original Specified Payment Currency becomes a Participating Member State (but should occur before the date on which the Specified Payment Currency ceases to be a sub-division of the euro).

General Right of Redenomination

On the Selected Redenomination Date, the Corporation may change the currency unit in which the Debt Securities are denominated and payable from the original Specified Payment Currency to the euro. In order to change such currency unit, the Corporation must give the Holders of the Debt Securities and the applicable clearing system at least 30 days' prior notice of the Corporation's intention to change such currency unit (the "Redenomination Notice"). The Corporation also will notify the Global Agent in writing of its intention to change such currency unit at least 45 days prior to the Selected Redenomination Date (unless the Corporation and the Global Agent mutually agree to a shorter time for notice to the Global Agent). The Corporation may change such currency unit, however, without the consent of the Holders or beneficial owners of the Debt Securities, the Global Agent, or such applicable clearing system.

The Redenomination Notice given by the Corporation will state the Selected Redenomination Date and describe the manner in which the redenomination will be effected. The Redenomination Notice also will describe the rounding convention to be used by the Corporation when redenominating the Debt Securities and the effect of such rounding convention. See "Description of the Debt Securities - Provisions Relating to Global Securities - Notices" for certain other general provisions regarding notices to Holders of the Debt Securities.

If the Corporation elects to redenominate the Debt Securities into euro, it will redenominate all, not just a part, of the outstanding Debt Securities. The Corporation will effect such redenomination by converting the aggregate outstanding principal amount of the Debt Securities, as stated in the original Specified Payment Currency, into euros by using the Fixed Conversion Rate and by rounding in compliance with rules regarding rounding set forth in applicable European Community regulations; provided, however, that if the Corporation determines, in consultation with the Global Agent, that the manner of such redenomination and/or rounding is not consistent with existing or anticipated market practice for the redenomination into euros of debt obligations issued in the euromarket (regardless of the original currency in which such debt obligations were denominated) and held in any international clearing system or is not practicable given the manner in which the Debt Securities are held and cleared through the applicable clearing system, the Corporation may, in consultation with the Global Agent, adopt such other method as is, or as it reasonably believes will be, so consistent or practicable.

Consequences of Redenomination

Immediately after such redenomination on the Selected Redenomination Date, euro will be deemed the new Specified Payment Currency in which payments of any amounts on the Debt Securities will be made after the Selected Redenomination Date. On the Selected Redenomination Date, however, the Corporation may pay any interest or principal then due on the Debt Securities either in the original Specified Payment Currency or in euros, as the Corporation may decide in its sole discretion and as the Corporation will describe in the Redenomination Notice.

In connection with the redenomination that occurs on the Selected Redenomination Date, the Corporation may determine, in consultation with the Global Agent, that additional changes to the terms of the Debt Securities are advisable in order to conform the Debt Securities to conventions then applicable to the issue or trading of instruments denominated or payable in euro ("Additional Conforming Changes"). The Additional Conforming Changes may include changes to Minimum Denominations and Additional Increments of the Debt Securities, day count fractions, the definition of "Business Day", and/or certain other terms of the Debt Securities. The Corporation may amend and/or replace any related Statement of Terms, Global Securities, definitive Debt Securities, and/or Global Agency Agreement in order to reflect the changes described in the Notice of Redenomination and all Additional Conforming Changes. In connection with such redenomination, the Corporation expects that, effective as of the Selected Redenomination Date, it will, among other changes:

n amend the definition of "Business Day" to be any day other than (a) a Saturday, (b) a Sunday, (c) a day on which banking institutions are required or permitted by law or governmental action to close in New York, New York, or (d) a day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) System is not open; and

n amend the day count fraction relating to the Debt Securities to an "Actual/Actual" basis.

Any Additional Conforming Changes will not take effect until at least 30 days' prior notice has been given to the Holders of the Debt Securities and the applicable clearing system and at least 45 days' prior written notice has been given to the Global Agent (unless the Corporation and the Global Agent mutually agree to a shorter time for notice to the Global Agent).

Notwithstanding any provisions contained in "Description of the Debt Securities - Provisions Relating to Global Securities - Modification and Amendment", the Corporation, after consultation with the Global Agent, will be able to take all of the actions described in and contemplated by this Annex without the consent of any Holders or beneficial owners of the Debt Securities.

Additional Background Information on the Euro

On the EMU Date, the euro will become a currency in its own right. During the third stage of EMU, the European Central Bank will assume authority for conducting the monetary policy of the Participating Member States. Currently, two Regulations of the Council of the European Union provide the legal framework regarding the introduction of the euro.

On June 17, 1997, the Council of the European Union adopted Council Regulation (EC) No. 1103/97 based on Article 235 of the Treaty (the "Article 235 Regulation"). The Article 235 Regulation:

n Reaffirms, among other things, the continuity of contracts and other legal instruments as a result of the introduction of the euro;

n Describes certain rules regarding the adoption of the rates for the conversion of the national currencies of the Participating Member States;

n Provides for the rounding of monetary amounts after conversion of those national currencies into the euro; and

n Provides that every reference in a legal document to the ECU will be replaced by a reference to the euro at the rate of one euro to one ECU on the EMU Date.

On May 3, 1998, the Council of the European Union adopted Council Regulation (EC) No. 974/98 based on Article 109 l(4) of the Treaty (the "Article 109 l(4) Regulation"). The Article 109 l(4) Regulation states that the third stage of EMU will begin on January 1, 1999. During the transitional period ending December 31, 2001:

n One euro will, in addition to being divided into 100 cents, be divided into the national currency unit of each Participating Member State according to the relevant Fixed Conversion Rate; and

n Banknotes and coins denominated in the national currency unit of a Participating Member State will continue to have legal tender status in such Participating Member State.

Once euro banknotes and coins are issued at the end of the transitional period, they will have legal tender status in all Participating Member States.

The Article 109 l(4) Regulation also provides that on December 31, 2001, the national currency units of the Participating Member States will cease to exist as sub-divisions of the euro. References to such national currency units in legal instruments still existing at the end of the transitional period will be deemed references to the euro unit according to the relevant Fixed Conversion Rates. However, banknotes and coins denominated in the national currency unit of a Participating Member State may still keep their status as legal tender in such Participating Member State for a period of up to six months after the end of the transitional period. A Participating Member State may shorten this six month period.

Exchange Rates of the Euro

Dealers in the foreign exchange markets are expected to provide bid and offer quotations for the exchange rate of the euro in terms of most of the world's currencies on a daily basis.

ANNEX 2

TO PRICING SUPPLEMENT DATED OCTOBER 9, 1998

RELATING TO:

Issue (Title): 5.375% Notes Due December 7, 2028

UNITED STATES TAXATION

In the opinion of Arnold & Porter, special tax counsel to the Corporation, the following paragraphs, when read in conjunction with the discussions under "United States Taxation" in the Offering Circular dated January 6, 1997, correctly describe the principal aspects of the current United States federal tax treatment of investors who purchase the Debt Securities described in the Offering Circular. The discussion does not purport to deal with all tax consequences applicable to all categories of investors, some of which may be subject to special rules.

Recent Tax Legislation

The discussion under the caption "United States Taxation—Recent Tax Legislation" in the August Supplement is replaced in its entirety with the following:

Tax rates on capital gain for individual Owners vary depending on each Owner's income and holding period for the Debt Security. Owners who are individuals should contact their own tax advisors for more information or for the capital gains tax rate applicable to a specific Debt Security.

Final Regulations Relating to Withholding and Information Reporting

The Offering Circular describes proposed regulations issued by the IRS relating to withholding, backup withholding and information reporting with respect to payments made to Non-U.S. Persons. In October 1997, the IRS finalized those regulations, and in March 1998 the IRS announced a delay in the effective date of the final regulations. The final regulations generally are effective for payments made after December 31, 1999. However, withholding certificates that are valid under the present rules and that are held by a Withholding Agent on December 31, 1999, remain valid until the earlier of December 31, 2000 or the expiration date of the certificate under the present rules (unless otherwise invalidated due to changes in the circumstances of the person whose name is on the certificate).

When effective, the new regulations will streamline and, in some cases, alter the types of statements and information that must be furnished to a Withholding Agent to claim a reduced rate of withholding. While various IRS forms (such as IRS Forms 1001 and 4224) currently are used to claim exemption from withholding or a reduced withholding rate, the preamble to the regulations states that the IRS intends most certifications to be made on revised Form W-8. The regulations also clarify the duties of Withholding Agents and modify the rules concerning withholding on payments made to Non-U.S. Persons through foreign intermediaries. With some exceptions, the new regulations treat a payment to a foreign partnership as a payment directly to the partners.