This Pricing Supplement relates to the issue of Debt Securities described below (the "Notes"). You should read it together with the Offering Circular dated October 17, 2005 (the "Offering Circular"), relating to the Universal Debt Facility of the Federal National Mortgage Association ("Fannie Mae"). Capitalized terms used in this Pricing Supplement have the meanings we gave to them in the Offering Circular, unless we specify otherwise.

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.

You should read and understand the following discussion of certain risk factors before purchasing the Notes. You also should read and understand the more complete discussion of risk factors that appears in the Offering Circular beginning on page 7. The following discussion and the Risk Factors section in the Offering Circular may not describe all of the risks and investment considerations (including those relating to your particular circumstances) of an investment in the Notes.

	You should consult your own financial and legal advisors about:

	*		the risks of an investment in the Notes (for example, the risks associated with the Notes' redemption feature);

	*		the appropriate tools to analyze a possible investment in the Notes;

	*		the suitability of your investing in the Notes in light of your particular situation (for example, if you need to receive the principal amount on the Maturity Date or need to receive fixed interest payments until the Maturity Date, the Notes may not be an appropriate investment for you because of the Notes' redemption feature); and

*

possible economic and interest rate scenarios and other factors that may affect your investment.

Our ability to redeem the Notes before the Maturity Date is likely to affect the market value of the Notes. During any period when we may elect to redeem the Notes, the Notes' market value generally will not rise substantially above the price at which we may redeem the Notes because of the increased likelihood of redemption. This also may be true prior to any such period.

You should not purchase the Notes unless you understand, can evaluate and are able to bear all risks of an investment in the Notes. These risks include the risks that the Notes may not be readily saleable, that the value of the Notes will fluctuate over time, and that such fluctuations may be significant and could result in significant losses to you. This is particularly the case if your circumstances may not permit you to hold the Notes until the Maturity Date. If you sell a Note prior to the Maturity Date, you may receive sales proceeds (less applicable transaction costs) that are less than the amount you originally invested.

We may be expected to redeem the Notes when our cost of borrowing is lower than the interest rate on the Notes. Because we are most likely to redeem the Notes when interest rates have fallen, principal is likely to be returned to you upon redemption at a time when prevailing interest rates are lower. Therefore, if we redeem the Notes before the Maturity Date, you generally will not be able to reinvest redemption proceeds at an effective interest rate as high as the interest rate on the Notes, and your reinvestment might be at a significantly lower rate. You should consider the related reinvestment risk in light of other investments available to you at that time.

If you are considering purchasing Notes at a premium (or a discount), you should consider the risk that a redemption relatively early (or late) following issuance of the Notes could result in an actual yield that is lower than your anticipated yield.

If we redeem a portion of the Notes, the market for the Notes left outstanding may not be very liquid.

CUSIP Number:

3136F8EC5

Certain Securities Terms

1.

Title:

Step Rate Notes Due January 30, 2017

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:

$15,000,000.00

5.

Issue Date:

January 30, 2007

6.

Maturity Date:

January 30, 2017

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 each Interest Payment Date, commencing July 30, 2007 at a redemption price of 100% of the principal amount redeemed, plus accrued interest thereon to the date of redemption.

If we elect to redeem the Notes, we will give notice of our intention to Holders of Notes not less than 10 days prior to the date of redemption in the manner described under "Description of the Debt Securities - Notices" in the Offering Circular. If we redeem a portion of the Notes, we will redeem a pro rata portion of the outstanding principal amount of each Note.

8.

Interest Category:

Step Rate Securities

9.

Interest

a.

Frequency of Interest Payments:

semiannually

b.

Interest Payment Dates:

the 30th day of each January and July

c.

First Interest Payment Date:

July 30, 2007

d

The interest rate on the outstanding principal amount will be as follows:

from and including

to but excluding

interest rate per annum

January 30, 2007

January 30, 2009

5.50%

January 30, 2009

January 30, 2011

5.80%

January 30, 2011

January 30, 2013

6.10%

January 30, 2013

January 30, 2015

6.40%

January 30, 2015

January 30, 2017

6.70%

Offering

1.

Pricing Date:

January 08, 2007

2.

Method of Distribution:

X Principal

__ Non-underwritten

3.

Dealer:

Amherst Securities Group LP.

4.

Offering Price:

__

Fixed Offering Price: ____% of principal amount, plus accrued interest, if any, from _____

X

Variable Price Offering

5.

Dealer Purchase Price: 99.49% of principal amount

a.

Concession:

0.016%

b.

Reallowance:

N/A

6.

Proceeds to Fannie Mae:

$14,923,500.00

Settlement

1.

Settlement Date:

January 30, 2007

2.

Settlement Basis:

delivery versus payment

3.

Settlement Clearing System:

U.S. Federal Reserve Banks

We have engaged Dewey Ballentine LLP as special tax counsel to review the discussion in the Offering Circular under the heading "United States Taxation." They have given us their opinion that the discussion correctly describes the principal aspects of the U.S. federal tax treatment of beneficial owners of Notes. They have also given us their opinion that the following discussion is a correct summary of some of the tax rules described in the Offering Circular that are particularly important to individual investors who purchase Notes. This discussion, and the discussion in the Offering Circular, are general discussions that may not apply to your particular circumstances.

A beneficial owner of a Note generally will include interest on the Note as ordinary income in accordance with his or her method of accounting for federal income tax purposes. Beneficial owners using the cash method of accounting, including most individuals, generally must include interest in income in the year in which they receive payment. Beneficial owners using the accrual method of accounting generally must include interest in income during the year in which it is earned or accrued, without regard to when they receive payment.

When you sell, exchange or otherwise dispose of a Note you generally will recognize gain or loss equal to the difference between the amount you paid for the Note and the sales price. Such gain or loss generally will be capital gain or loss, except to the extent attributed to accrued interest. Any capital gain or loss will be long-term capital gain or loss if at the time of disposition you have held the Note for more than one year.

Payments of interest on, and proceeds from the sale of, a Note held by an individual and certain other non-exempt holders generally must be reported to both the Internal Revenue Service and to the individual. Backup withholding of U.S. federal income tax may apply to payments made on a Note unless you provide your taxpayer identification number, certified under penalties of perjury, and certain other information. Generally, an individual's taxpayer identification number is his or her Social Security number.

For a more detailed discussion of the tax rules applicable to beneficial owners of Notes, see "United States Taxation" in the Offering Circular. Different rules may apply to investors who are not U.S. Persons, who do not hold the Note as capital assets, or to whom other special circumstances may apply. If you are considering purchasing a Note you should consult your own tax advisors to determine the tax consequences to you.

The Notes or interest thereon are not exempt from taxation by any state, locality or other governmental unit.

 

X Additional Tax Information: The Notes may be issued with OID or at a premium. See "United States Taxation - U.S. Persons - Debt Securities Issued at a Discount" and "United States Taxation - U.S. Persons - Debt Securities Purchased at a Premium" in the Offering Circular.