FannieMae Offering Circular

(To Offering Circular dated January 23, 2001)

6.25% Subordinated Benchmark Notes® due 2011

This Offering Circular Supplement relates to the=20 offer of $1,500,000,000 6.25% Subordinated Notes due 2011 (the=20 “Notes”) of the Federal National Mortgage Association=20 or “Fannie Mae”. You should read it together with the=20 Offering Circular dated January 23, 2001 (the=20 “Offering Circular”) relating to our Universal Debt=20 Facility.

The Notes will mature on February 1, 2011.=20 We may not redeem the Notes prior to maturity. The Notes will be=20 unsecured subordinated obligations of Fannie Mae, ranking junior=20 in right of payment to all of Fannie Mae’s existing and=20 future “Senior Liabilities.”

The Notes will bear interest at a fixed rate of 6.25% per annum. We will pay interest on the Notes semi-annually=20 on February 1 and August 1 of each year, beginning=20 August 1, 2001. Upon the occurrence of certain events described under “Description of the=20 Notes—Interest,” we will defer the payment of interest=20 on the Notes for periods not to exceed five years. The consequences of a deferral of interest are described in this=20 Supplement. You should read “United States Taxation”=20 in this Supplement for a discussion of selected United States=20 federal tax considerations relevant to the Notes.

The Notes are being offered globally for sale in=20 the United States, Europe, Asia and elsewhere where it is lawful=20 to make such offers. Application has been made to list the Notes=20 on the Luxembourg Stock Exchange.

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.

An investment in the Notes may involve risks for some investors. It is important that you read the “Risk Factors” section beginning on page S-6 of this Supplement and page 7 of the Offering Circular.

The Notes will be issued in book-entry form on=20 the book-entry system of the U.S. Federal Reserve Banks on=20 February 1 , 2001.

Bear, Stearns & Co., Inc.


	Blaylock & Partners, L.P.


	Credit Suisse First Boston


	Lehman Brothers


	Merrill Lynch & Co.


	JP Morgan

® “Benchmark Notes” is a=20 registered service mark of Fannie Mae.

We are not required to register the Notes under the U.S.=20 Securities Act of 1933, as amended. Accordingly, we have not=20 filed a registration statement with the U.S. Securities and=20 Exchange Commission. The Notes are “exempted=20 securities” within the meaning of the U.S. Securities=20 Exchange Act of 1934, as amended. Neither the U.S. Securities=20 and Exchange Commission nor any state securities commission or other regulatory body has approved or disapproved the Notes or=20 determined if this Supplement or the Offering Circular is=20 truthful or complete. Any representation to the contrary is a criminal offense.

The distribution of this Supplement and the Offering Circular=20 and the offer, sale, and delivery of the Notes in certain=20 jurisdictions may be restricted by law. Persons who come into=20 possession of this Supplement and the Offering Circular must=20 inform themselves about and observe any applicable restrictions.

This Supplement is not an offer to sell or a solicitation of an=20 offer to buy any securities other than the Notes or an offer to=20 sell or a solicitation of an offer to buy the Notes in any=20 jurisdiction or in any other circumstance in which an offer or=20 solicitation is unlawful or not authorized.

Because we are not subject to the periodic reporting=20 requirements of the U.S. Securities Exchange Act of 1934,=20 we do not file reports or other information with the=20 U.S. Securities and Exchange Commission.

No person has been authorized to give any information or make=20 any representations other than those contained in this=20 Supplement and the Offering Circular, and, if given or made, such information or representations must not be relied upon as=20 having been authorized. Neither the delivery of this Supplement=20 nor any sale made hereunder shall, under any circumstances, create an implication that there has been no change in the affairs of Fannie Mae since the date hereof, or in the case of facts set forth in the documents incorporated by reference herein, since the respective dates thereof or that the information contained herein or therein is correct as to any time subsequent thereto.

Unless defined in this Supplement, capitalized terms have the meanings we gave to them in the Offering Circular. Any statement contained in the Offering Circular shall be deemed to be modified or superseded to the extent that a statement contained in this Supplement modifies or supersedes such statement. Any such statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this Supplement and the Offering Circular.

We are not preparing a Pricing Supplement for the Notes. We describe the specific terms of the Notes in this Supplement.

TABLE OF CONTENTS


Offering Circular = Supplement	Page

Summary of the Offering		S-3




Risk Factors		S-6




Fannie Mae		S-7




Use of Proceeds		S-8




Rating		S-8




Capital Requirements		S-8




Description of the Notes		S-9




Legality of Investment		S-12




United States Taxation		S-12




Plan of Distribution		S-14




Accountants		S-15




Validity of the Notes		S-15




Additional Information About Fannie Mae		S-15




Offering Circular	Appendix A

This summary highlights information contained elsewhere in,=20 or incorporated by reference in, this Supplement and the=20 Offering Circular. It does not contain all of the information you should consider before investing in the Notes. You also=20 should read the more detailed information contained elsewhere in=20 this Supplement and the Offering Circular and in the documents=20 incorporated herein by reference. See Appendix H to the=20 Offering Circular for the location of terms used in this=20 Supplement that are defined or explained in the Offering=20 Circular.

Fannie Mae is a federally chartered and stockholder-owned corporation organized and existing under the Federal National Mortgage Association Charter Act. We are the largest investor in home mortgage loans in the United States. We were established in 1938 as a United States government agency to provide supplemental liquidity to the mortgage market and were transformed into a stockholder-owned and privately managed corporation by legislation enacted in 1968.

Prospective purchasers of the Notes should consider carefully=20 the risk factors set forth below, as well as all other=20 information contained or incorporated by reference in this=20 Supplement and the Offering Circular, in evaluating an=20 investment in the Notes. You should also read the “Risk=20 Factors” section of the Offering Circular.

Fannie Mae’s obligations under the Notes will be issued=20 under Section 304(e) of the Charter Act and will be unsecured=20 and subordinated and will rank junior in priority of payment to=20 our existing and future Senior Liabilities. This means that we=20 cannot make any payments of principal of or interest on the=20 Notes if we default on any payment due in respect of any Senior=20 Liabilities. See “Description of the = Notes—Subordination” beginning on page S-10. In the = event of a liquidation or dissolution of Fannie Mae, our assets would be=20 available to pay obligations under the Notes only after all=20 payments had been made of amounts then due in respect of all Senior Liabilities.

At December 31, 2000, we had outstanding total liabilities=20 of $654,234 million, all of which constitute Senior Liabilities.=20 Senior Liabilities also include any liabilities related to the=20 $706,684 million of mortgage-backed securities outstanding=20 at that date on which Fannie Mae guarantees timely payment of=20 principal and interest. This excludes $351,066 million of=20 mortgage-backed securities held by us in portfolio at that date.

If (1) our core capital is below 125% of our critical=20 capital requirement, or (2)(a) our core capital is below our=20 minimum capital requirement and (b) the U.S.=20 Secretary of the Treasury, acting on our request, exercises his=20 or her discretionary authority under Section 304(c) of the=20 Charter Act to purchase our debt obligations, then we must defer=20 the payment of interest on the Notes and on other Subordinated=20 Debt Securities for periods not to exceed five years. (The U.S.=20 Secretary of the Treasury has discretionary authority to=20 purchase obligations of Fannie Mae up to a maximum of $2.25=20 billion outstanding at any one time). See “Description of=20 the Notes—Interest” on page S-9.

We will pay all deferred interest, and interest on that deferred=20 interest, on the Notes and all other Subordinated Debt=20 Securities as soon as, after giving effect to such payments, we=20 no longer would be required to defer interest under the terms=20 described above, and we have repaid all debt obligations, if=20 any, purchased by the U.S. Secretary of the Treasury as=20 described above. We will make this payment in respect of the=20 Notes on the next scheduled Interest Payment Date that occurs in=20 respect of the Notes or any other issue of Subordinated Debt=20 Securities, unless we elect to make the payment earlier.

If we have not resumed interest payments on the Notes by their=20 Maturity Date or have deferred interest on the Notes for five=20 consecutive years, then we must pay deferred interest, and=20 interest thereon, on the Notes regardless of our capital levels or our repayment of debt obligations purchased by the U.S.=20 Secretary of the Treasury. Even if we are required to make any=20 payment on the Notes, because the Notes are subordinated,=20 Holders of the Notes will be entitled to receive payments only=20 after we have made payment in full of all amounts then due in=20 respect of any Senior Liabilities. In no event will Holders of=20 the Notes be able to accelerate the maturity of their Notes;=20 such Holders will have claims only for amounts then due and=20 payable on their Notes. After we have fully paid all deferred=20 interest on the Notes and if the Notes remain outstanding,=20 future interest payments on the Notes will be subject to further=20 deferral as described above.

Upon the deferral of interest payments, you generally will be=20 required to accrue income, for United States federal income tax=20 purposes, in respect of the accrued but unpaid interest on Notes=20 held by you, as further described below under “United=20 States Taxation.” As a result, you generally will recognize=20 income for United States federal income tax purposes in advance=20 of the receipt of payment. Additionally, you will not receive=20 the payment of that interest if you dispose of your Notes prior=20 to the record date for the payment of accrued interest. Even though any income with respect to deferred interest will constitute ordinary income, if you sell your Notes you generally will recognize a capital loss to the extent that the selling price (which may not reflect the full amount of deferred interest) is less than your adjusted tax basis. Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for United States federal income tax purposes. See “United States Taxation.”

Any deferral of interest payments will likely have an adverse=20 effect on the market price of the Notes. In addition, as a=20 result of the interest deferral provision of the Notes, the=20 market price of the Notes may be more volatile than the market=20 prices of other debt securities on which original issue discount=20 or interest accrues that are not subject to such deferrals and=20 may be more sensitive generally to adverse changes in Fannie=20 Mae’s financial condition.

The Notes constitute a new issue of securities with no=20 established trading market. Application has been made to list=20 the Notes on the Luxembourg Stock Exchange. There can be no=20 assurance that an active market for the Notes will develop or be=20 sustained in the future. Although the Dealers have indicated to=20 us that they intend to make a market in the Notes, they are not=20 obligated to do so and may discontinue any such market-making at=20 any time without notice. Accordingly, no assurance can be given=20 as to the liquidity of, or trading markets for, the Notes.

Additionally, the Notes may trade at prices that do not fully=20 reflect the amount of accrued but unpaid interest or deferred=20 interest.

Fannie Mae is a federally chartered and stockholder-owned=20 corporation organized and existing under the Federal National=20 Mortgage Association Charter Act, 12 U.S.C. § 1716 et seq. (the “Charter=20 Act”). See “Government Regulation and Charter=20 Act” in the Information Statement and “Additional=20 Information About Fannie Mae” in this Supplement. We are=20 the largest investor in home mortgage loans in the United=20 States. We were established in 1938 as a United States=20 government agency to provide supplemental liquidity to the=20 mortgage market and were transformed into a stockholder-owned=20 and privately managed corporation by legislation enacted in 1968.

Fannie Mae provides funds to the mortgage market by purchasing=20 mortgage loans from lenders, thereby replenishing their funds=20 for additional lending. We acquire funds to purchase these loans=20 by issuing debt securities to capital market investors, many of=20 whom ordinarily would not invest in mortgages. In this manner,=20 we are able to expand the total amount of funds available for=20 housing.

Fannie Mae also issues mortgage-backed securities=20 (“MBS”), receiving guaranty fees for our guarantee of=20 timely payment of principal and interest on MBS certificates. We issue MBS primarily in exchange for pools of mortgage loans from=20 lenders. The issuance of MBS enables us to further our statutory=20 purpose of increasing the liquidity of residential mortgage=20 loans.

In addition, Fannie Mae offers various services to lenders and=20 others for a fee. These services include issuing certain types=20 of MBS and providing technology services for originating and=20 underwriting mortgage loans. See “Business” in the=20 Information Statement and “Additional Information About=20 Fannie Mae” in this Supplement.

Fannie Mae’s principal office is located at 3900 Wisconsin=20 Avenue, N.W., Washington, D.C. 20016 (telephone: (202) 752-7000).

We will add the net proceeds from the sale of the Notes to=20 retire our outstanding debt securities or add the proceeds to=20 our working capital and use them for general corporate purposes.=20 We anticipate the need for additional financing from time to=20 time, including financing through various types of debt=20 securities. The amount and nature of the financing will depend=20 upon a number of factors, including the volume of our maturing=20 debt obligations, the volume of mortgage loan prepayments, the=20 volume and type of mortgage loans we purchase, and general=20 market conditions.

The Notes are expected to be rated “Aa2” by=20 Moody’s Investors Service, Inc. and “AA-” by=20 Standard & Poor’s Ratings Group, a Division of the=20 McGraw-Hill Companies.


	•	the stated value of our outstanding common stock,

	•	the stated value of our non-cumulative perpetual preferred stock,

	•	paid in capital, and

	•	retained earnings.


	•	1.25% of on-balance sheet assets,

	•	.25% of outstanding mortgage-backed securities, and

	•	.25% of other off-balance sheet obligations, which may be=20 adjusted by the Director of OFHEO under certain circumstances.


	•	2.50% of on-balance sheet assets,

	•	.45% of net outstanding mortgage-backed securities, and

	•	.45% of other off-balance sheet obligations, which may be=20 adjusted by the Director of OFHEO under certain circumstances=20 (See 12 CFR § 1750.4 for existing adjustments made by the=20 Director of OFHEO).

Prior to 2001, OFHEO has reviewed our core capital and minimum=20 capital levels and determined our capital classification on a=20 quarterly basis. Beginning in 2001, we will provide core capital=20 and minimum capital data to OFHEO on a monthly basis. It is=20 uncertain at this time whether OFHEO will continue to publicly=20 release only our quarter-end core and minimum capital levels or=20 will release our month-end capital levels. In any event, OFHEO=20 may not announce our capital levels or our capital=20 classification until up to approximately 90 days following=20 a period-end due to the time required for Fannie Mae to prepare the required data, for OFHEO to review that data and for Fannie Mae to review OFHEO’s proposed capital levels and capital classification.

OFHEO currently does not publicly announce our critical capital=20 level, and we are uncertain at this time whether OFHEO will=20 publicly announce that level in the future. If OFHEO does not=20 publicly announce our critical capital level, we will calculate=20 that level and have it verified by an independent third party.=20 We will publicly announce that verified critical capital level=20 promptly following OFHEO’s public announcement of our core=20 and minimum capital levels.

The Federal Housing Enterprises Financial Safety and Soundness=20 Act of 1992 sets forth the criteria for calculating Fannie Mae’s core capital level and our critical capital and=20 minimum capital requirements. With respect to the calculations=20 of our minimum and critical capital levels, the Director of=20 OFHEO may adjust the percentage applicable to certain=20 off-balance sheet obligations to reflect differences in the=20 credit risk of those obligations in relation to the credit risk=20 on our off-balance sheet mortgage-backed securities. The=20 Director of OFHEO has made such an adjustment with respect to=20 the calculation of our minimum capital requirement but not to=20 our critical capital requirement. (See 12 CFR §1750.4). We,=20 however, compute our critical capital level using the=20 adjustments made by the Director of OFHEO with respect to=20 minimum capital. The Director of OFHEO may in the future make=20 further such adjustments to our minimum and critical capital=20 requirements.

Fannie Mae expects to issue Subordinated Debt Securities in an=20 amount such that, following a three-year phase-in period, the=20 sum of our core capital, loss allowances and outstanding=20 Subordinated Debt Securities will equal or exceed four percent=20 of on-balance sheet assets, after setting aside capital=20 sufficient to support off-balance sheet mortgage-backed=20 securities.

The Notes will be issued as Fed Book-Entry Securities in=20 book-entry form on the book-entry system of the U.S. Federal=20 Reserve Banks. The Notes may be held indirectly through the clearing systems operated by Euroclear and Clearstream. Fed=20 Book-Entry Securities will not be exchangeable for definitive=20 securities. The Notes are not eligible to be separated or=20 “stripped” into their separate interest components and=20 principal components.

The Notes are being offered globally for sale in the United=20 States, Europe, Asia and elsewhere where it is lawful to make=20 such offers. Application has been made to list the Notes on the=20 Luxembourg Stock Exchange. The Specified Payment Currency for=20 the Notes will be U.S. dollars.

The Maturity Date of the Notes will be February 1, 2011,=20 and the Notes may not be redeemed prior to maturity. The Notes=20 will not contain any provisions permitting the Holders to=20 accelerate the maturity thereof on the occurrence of any default=20 or other event.

The Notes will be Fixed Rate Securities and will accrue interest=20 from February 1, 2001 at a rate of 6.25% per annum.=20 Interest will be calculated on the basis of a 360-day year=20 consisting of twelve 30-day months. The Interest Payment Dates=20 will be February 1 and August 1 of each year,=20 commencing August 1, 2001.

We will defer the payment of interest on the Notes and on all=20 other outstanding Subordinated Debt Securities if, as of the=20 fifth Business Day prior to a Deferral Determination Date:


	•	our “core capital” is below 125% of our “critical=20 capital” requirement,


	•	(1) our “core capital” is below our “minimum=20 capital” requirement and (2) the U.S. Secretary=20 of the Treasury, acting on our request, exercises his or her=20 discretionary authority pursuant to Section 304(c) of the=20 Charter Act to purchase our debt obligations.

We will use the core, critical and minimum capital levels most=20 recently announced by OFHEO, pursuant to its then current=20 methodology for calculating those levels, prior to any such=20 Deferral Determination Date to determine whether we must defer=20 interest on the Notes and all other outstanding Subordinated=20 Debt Securities.

If legislation is enacted that revises the definition of core, critical or minimum capital, or if OFHEO ceases to announce any=20 of these capital levels, Fannie Mae will calculate any revised=20 or no longer announced capital levels on a monthly basis in=20 accordance with the current statutory definitions and the=20 then-current OFHEO requirements. An independent third party will=20 verify any capital levels that we are required to calculate.=20 Upon such third party verification, we will publicly announce=20 the results. See “Capital Requirements”.

Based on the most recent OFHEO announcement regarding our core=20 capital and minimum capital levels, at September 30, 2000,=20 Fannie Mae had core capital of $19,870 million or 200.3% of=20 our critical capital requirement of $9,918 million and=20 $489 million above our minimum capital requirement of=20 $19,381 million as of that date.

We may not defer interest on the Notes for more than five=20 consecutive years or beyond their Maturity Date.

If we defer the payment of interest on the Notes, interest will=20 continue to accrue on the Notes and will compound at a rate of=20 6.25% per annum.

If we have not resumed interest payments on the Notes by their=20 Maturity Date or have deferred interest on the Notes for five=20 consecutive years, then we must pay deferred interest, and=20 interest thereon, on the Notes regardless of our core capital=20 levels or our repayment of all debt obligations purchased by the=20 U.S. Secretary of the Treasury. Even if we are required to make any payment on the Notes, because the Notes are subordinated,=20 Holders of the Notes will be entitled to receive payments only=20 after we have made payment in full of all amounts then due in=20 respect of Senior Liabilities. In no event will Holders of the=20 Notes be able to accelerate the maturity of their Notes; such=20 Holders will have claims only for amounts then due and payable=20 on their Notes. After we have fully paid all deferred interest=20 on the Notes and if the Notes remain outstanding, future=20 interest payments on the Notes will be subject to further deferral as described above.

During periods when we defer the payment of interest on the=20 Notes or other Subordinated Debt Securities, we may not declare=20 or pay dividends on, or redeem, purchase or acquire, our common=20 stock or our preferred stock.

You should read “United States Taxation” in this=20 Supplement for a discussion of selected United States federal=20 income tax considerations in the event of a deferral of interest=20 payments under the Notes.

The Notes will be unsecured subordinated obligations of Fannie=20 Mae issued under Section 304(e) of the Charter Act. The=20 Notes will rank junior in priority of payment to our=20 “Senior Liabilities”. “Senior Liabilities”=20 means all existing and future liabilities of Fannie Mae, other=20 than liabilities that by their terms expressly rank equal with or junior to Subordinated Debt Securities. Senior Liabilities include, but are not limited to, debt obligations issued under Section 304(b) of the Charter Act, liabilities in respect of our guarantees on mortgage-backed securities and Fannie Mae’s Outstanding Capital Debentures.

In the event and during the continuation of any default in the=20 payment of any amount due in respect of Senior Liabilities,=20 beyond any applicable period of grace, then, unless and until=20 such default shall have been cured or waived or shall have=20 ceased to exist, we can pay no principal of or interest on the Notes unless we have made adequate provision for the payment in=20 full of such amounts then due in respect of all Senior Liabilities.

Upon any distribution of assets of Fannie Mae resulting from any=20 dissolution, winding up, total or partial liquidation or=20 reorganization (whether in bankruptcy, insolvency,=20 reorganization or receivership proceedings), or upon an=20 assignment for the benefit of creditors or any other marshalling=20 of assets and liabilities of Fannie Mae, payments on the Notes=20 are subordinated to the extent provided in the Notes in right of=20 payment to the prior payment of amounts then due in respect of=20 Senior Liabilities, but the obligation of Fannie Mae to make=20 payments on the Notes will not otherwise be affected. Because=20 the Notes are subordinated in right of payment to Senior=20 Liabilities, in the event of a distribution of assets upon=20 insolvency, holders of Senior Liabilities may recover more,=20 ratably, than Holders of the Notes. Holders of the Notes will be=20 subrogated to the rights of holders of Senior Liabilities to the=20 extent of payments made on such Senior Liabilities upon any=20 distribution of assets in any proceedings in respect of the=20 Notes.

At December 31, 2000, we had outstanding total liabilities=20 of $654,234 million, all of which constitute Senior=20 Liabilities. Senior Liabilities also include any liabilities=20 related to the $706,684 million of mortgage-backed=20 securities outstanding at that date on which Fannie Mae=20 guarantees timely payment of principal and interest. This=20 excludes $351,066 million of mortgage-backed securities=20 held by us in portfolio at that date.

We may increase the size of this issue of Notes from time to=20 time without the consent of any Holder of a Note by issuing=20 additional Notes with the same terms (other than the date of=20 issuance, interest commencement date and offering price, which=20 may vary). We may reopen this issue of Notes one or more times=20 within six months of the date of issuance to increase the size=20 and liquidity of the issue. We may reopen this issue of Notes=20 during that six-month period in any month when there is requisite investor demand and the reopening is consistent with=20 our funding needs and overall market conditions. The evaluation of these criteria and, consequently, the decision whether to=20 reopen the Notes are in our sole discretion. We cannot assure=20 you that we will reopen this issue of Notes or, if reopened,=20 what the total issue size will be.

We will give prompt notice of any event that would require=20 deferral of the payment of interest on the Notes. We will also=20 give notice of the resumption of the payment of interest on the=20 Notes. We will give all notices by broadcast through the=20 communications system of the U.S. Federal Reserve Banks. We also=20 will give notices in a general circulation newspaper in the City=20 of New York and, if and so long as the Notes are listed on the=20 Luxembourg Stock Exchange, in Luxembourg (which is expected to=20 be the Luxemburger Wort) or, if publication in Luxembourg=20 is not practical, elsewhere in Europe. Notice by publication=20 will be considered given on the date of publication or, if=20 published more than once, on the date of first publication.

National banks may purchase, hold and invest in the Notes for=20 their own accounts without regard to limitations generally=20 applicable to investment securities. Federal savings=20 associations and federal savings banks may invest in the Notes=20 without regard to limitations generally applicable to=20 investments. Federally insured state-chartered banks,=20 state-chartered savings banks and state-chartered savings and=20 loan associations may invest in the Notes to the extent=20 permitted by the Secondary Mortgage Market Enhancement Act of=20 1984 (“SMMEA”) and by applicable state law, after=20 complying with any procedures imposed by the state. We have=20 requested advice from the appropriate regulators as to the=20 applicable risk weighting of the Notes for capital adequacy=20 purposes.

In addition to the specific authorizations discussed above, §106(a)(1) of SMMEA provides that any person, trust,=20 corporation, partnership, association, business trust or business entity created pursuant to or existing under the laws=20 of the United States or any state (including the District of=20 Columbia and Puerto Rico) (an “investor”) is=20 authorized to purchase, hold and invest in securities issued or=20 guaranteed by Fannie Mae (including the Notes) to the same=20 extent that such investor is authorized to purchase, hold or=20 invest in obligations issued or guaranteed as to principal and=20 interest by the United States or any agency or instrumentality=20 thereof. Prior to October 4, 1991, states were authorized=20 by SMMEA to enact legislation that either prohibited or limited=20 an investor’s authority to purchase, hold or invest in=20 securities issued or guaranteed by Fannie Mae. To the best of=20 our knowledge, 18 states currently have legislation limiting to=20 varying extents the ability of certain entities (in most cases,=20 insurance companies) to invest in securities issued or=20 guaranteed by Fannie Mae, including the Notes.

Notwithstanding the above, investors should consult their legal=20 advisors to determine whether and to what extent the Notes=20 constitute legal investments for such investors or are eligible=20 to be used as security for borrowings. The foregoing does not=20 take into consideration the application of statutes,=20 regulations, orders, guidelines or agreements generally=20 governing investments made by a particular investor, including=20 but not limited to “prudent investor” provisions,=20 safety and soundness conditions and percentage-of-assets limits.=20 The regulatory authorities that administer the legal provisions=20 referred to above generally reserve discretion whether=20 securities, such as the Notes, that are otherwise acceptable for=20 investment may be purchased or pledged by the institutions=20 subject to their jurisdiction. An institution under the=20 jurisdiction of the Comptroller of the Currency, the Board of=20 Governors of the Federal Reserve System, the Federal Deposit=20 Insurance Corporation, the Office of Thrift Supervision, the=20 National Credit Union Administration, or any other federal or=20 state agency with similar authority should review any applicable=20 regulations, policy statements and guidelines before purchasing=20 the Notes.

The Notes and payments thereon generally are subject to=20 taxation. Therefore, you should consider the tax consequences of owning and receiving payments on a Note before acquiring one.

The following discussion supplements the discussion under the=20 caption “United States Taxation” in the Offering=20 Circular. We have engaged Arnold & Porter as special=20 tax counsel to review these discussions. They have given us=20 their opinion that, when read together, the two discussions=20 correctly describe the principal U.S. federal income tax=20 consequences applicable to beneficial owners of the Notes. These=20 two discussions do not purport to deal with all U.S. federal tax=20 consequences applicable to all categories of beneficial owners,=20 some of which may be subject to special rules. In addition,=20 these discussions may not apply to your particular circumstances=20 for one of the reasons explained in the Offering Circular. You=20 should consult your own tax advisors regarding the federal=20 income tax consequences of purchasing, owning and disposing of=20 Notes as well as any tax consequences arising under the laws of=20 any state, local or foreign taxing jurisdiction.

Under the OID Regulations, a debt instrument will generally be=20 treated as issued with OID if the stated interest on the debt=20 instrument does not constitute “qualified stated=20 interest.” Qualified stated interest is generally any one=20 of a series of stated interest payments on a debt instrument=20 that are unconditionally payable at least annually at a single=20 fixed rate. In determining whether stated interest on a debt=20 instrument is unconditionally payable and thus constitutes=20 qualified stated interest, remote contingencies as to the timely=20 payment of stated interest are ignored.

In the case of the Notes, we have concluded that the likelihood of a deferral of payments of interest pursuant to either of the events described under “Description of the = Notes—Interest” is remote. Accordingly, we believe and will = take the position that all stated interest on the Notes constitutes=20 qualified stated interest. Based on these conclusions and except=20 as set forth below, stated interest on a Note generally will be=20 included in income by a beneficial owner of the Note as ordinary=20 income at the time it is paid or accrued in accordance with the=20 beneficial owner’s regular method of accounting.

If the likelihood (as of time of the issuance of the Notes) of a=20 deferral of any payment of interest was determined not to be=20 remote or if any payment of interest on the Notes is actually=20 deferred, the Notes would be treated as issued with OID at the=20 time of issuance or at the time of such deferral, as the case=20 may be, and all stated interest would thereafter be treated as=20 OID as long as the Notes remained outstanding. In that event,=20 all of a beneficial owner’s taxable interest income in=20 respect of the Notes would constitute OID that generally would=20 have to be included in income on a constant yield method before=20 the receipt of the cash attributable to such income, regardless=20 of the beneficial owner’s method of tax accounting, and=20 actual distributions of stated interest would not be reported as=20 taxable income. See “United States Taxation—U.S.=20 Persons—Debt Securities Issued at a Discount” in the=20 Offering Circular.

The portion of the OID Regulations referred to above has not=20 been interpreted by any court decision or addressed in any=20 ruling or other pronouncement of the IRS, and it is possible=20 that the IRS could take a position contrary to the conclusions=20 above.

The IRS recently issued final regulations regarding whether=20 additional debt instruments issued in a reopening will be=20 considered part of the same issue as the original debt=20 instruments for tax purposes. The new regulations state that they will apply to reopenings after March 12, 2001. You=20 should note, however, that the new regulations may be reviewed=20 in accordance with the memorandum dated January 20, 2001=20 regarding the regulatory review plan issued by the new U.S.=20 presidential administration (66 Fed. Reg. 7702,=20 January 24, 2001).

Subject to the terms and conditions set forth in the Dealer=20 Agreement, Fannie Mae has agreed to sell to each of the Dealers=20 named below, and each of the Dealers, for whom Goldman,=20 Sachs & Co., Morgan Stanley & Co. Incorporated and=20 Salomon Smith Barney Inc. are acting as joint lead managers (the=20 “Lead Managers”), has severally agreed to purchase,=20 the amount of Notes set forth opposite its name below:

In the Dealer Agreement, the Dealers have severally agreed,=20 subject to the terms and conditions set forth therein, to=20 purchase all the Notes offered hereby if any are purchased.

The Lead Managers have advised Fannie Mae that the Dealers=20 propose initially to offer the Notes to the public at the=20 initial public offering price set forth on the cover page of=20 this Supplement, and to certain Dealers at such price less a=20 concession not in excess of .320% of the principal amount of the=20 Notes. After the initial public offering, the public offering=20 price and concession may be changed.

Prior to this offering, there has been no public market for the=20 Notes. Application will be made to list the Notes on the=20 Luxembourg Stock Exchange. The Lead Managers have advised Fannie=20 Mae that they intend to make a market in the Notes, but are not=20 obligated to do so and may discontinue any such market making at=20 any time without notice.

In the Dealer Agreement, Fannie Mae and the Dealers have agreed=20 to indemnify each other against and contribute toward certain=20 liabilities.

The Dealers and certain affiliates thereof engage in=20 transactions with and perform services for Fannie Mae in the=20 ordinary course of business.

The Dealers, through Morgan Stanley & Co. Incorporated, as=20 stabilizing manager, may engage in certain transactions that=20 stabilize the price of the Notes. These transactions may include=20 entering stabilizing bids, which means the placing of a bid or=20 the effecting of a purchase for the purpose of pegging, fixing=20 or maintaining the price of the Notes. Neither we nor the=20 Dealers make any representation or prediction as to the=20 direction or magnitude of any effect that the transactions described above may have on the price of the Notes. The Dealers=20 are not required to engage in any of these transactions. When so=20 doing, the Dealers act on their own behalf and not as our=20 representatives. Any such transactions, if commenced, may be=20 discontinued at any time.

The financial statements of Fannie Mae as of December 31,=20 1999 and 1998 and for each of the years in the three-year period=20 ended December 31, 1999, incorporated by reference herein,=20 have been included in reliance upon the report of KPMG LLP,=20 independent certified public accountants.

The validity of the Notes will be passed upon for Fannie Mae by=20 Brown & Wood LLP, New York, New York, and for the=20 Dealers by Sullivan & Cromwell, Washington, D.C.=20 Certain U.S. federal income tax matters will be passed upon for=20 Fannie Mae by Arnold & Porter, Washington, D.C.

This Supplement and the Offering Circular should be read only in=20 conjunction with our Information Statement dated March 30,=20 2000 (the “Information Statement”) and the Supplements=20 thereto dated May 15, 2000, August 14, 2000, November 14, 2000 and January 19, 2001, all of which=20 are incorporated herein by this reference. Any Information=20 Statement, supplement to it, or proxy statement published by us=20 subsequent to the date of this Supplement and prior to the=20 termination of the offering of the Notes shall be deemed to be=20 incorporated herein by this reference. You should rely only on=20 the information provided or incorporated by reference in this=20 Supplement and the Offering Circular, and you should rely only=20 on the most current information.

You can obtain copies of any or all documents incorporated in=20 this Supplement and the Offering Circular by reference without=20 charge from the Office of Investor Relations, Fannie Mae, 3900 Wisconsin Avenue, N.W., Washington, D.C.=20 20016 (telephone: (202) 752-7115) or by accessing our World=20 Wide Web site at www.fanniemae.com. In addition, copies of such=20 documents can be obtained from any of the Dealers. You can read=20 the Information Statement, proxy statements and other=20 information concerning us at the offices of the New York Stock=20 Exchange, the Chicago Stock Exchange and the Pacific Exchange.=20 See “Additional Information About Fannie Mae” in the=20 Offering Circular.

Debt Securities with maturities of one day or longer

We, the Federal National Mortgage Association, or Fannie Mae, may issue an unlimited amount of Debt Securities from time to time under our Universal Debt Facility. We will designate some Debt Securities as Benchmark Securities^SM, which are U.S. dollar denominated, regularly scheduled issues in large principal amounts. Our current Benchmark Securities are:

We may issue other Debt Securities, denominated in U.S. dollars or other currencies, with maturities of one day or longer. The Debt Securities will have various terms, as described in this Offering Circular and any applicable pricing supplement. These Debt Securities will be:

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 Fannie Mae.

An investment in Debt Securities may involve risks for some investors. It is important that you read the “Risk Factors” section beginning on page 7.

We may sell Debt Securities to or through one or more Dealers as principal or otherwise, or directly to investors. We cannot=20 assure you that there will be a secondary market for the Debt=20 Securities or how liquid the market will be if one develops.

We have made an application to list Debt Securities issued under=20 this Universal Debt Facility through January 22, 2002, on=20 the Luxembourg Stock Exchange. We also may issue unlisted Debt=20 Securities and Debt Securities listed on other stock exchanges.

This Offering Circular applies to Debt Securities settling=20 upon original issuance on or after=20 February 1, 2001.

“Benchmark Securities”, “Benchmark Bills”,=20 “Benchmark Bonds” and “Callable Benchmark=20 Notes” are service marks of Fannie Mae. “Benchmark=20 Notes” is a registered service mark of Fannie Mae.

In connection with any issue of Debt Securities, a Dealer=20 identified as stabilizing manager in the applicable Pricing=20 Supplement may, subject to applicable laws and regulations,=20 overallot or effect transactions which stabilize or maintain the=20 market price of the Debt Securities of such issue at a level=20 above that which might otherwise prevail in the open market.=20 Such transactions may be effected on any exchange on which the=20 Debt Securities may be listed, in an over-the-counter market or=20 otherwise. Such stabilization, if commenced, may be discontinued=20 at any time.

We are not required to register the Debt Securities under the=20 U.S. Securities Act of 1933, as amended. Accordingly, we have=20 not filed a registration statement with the U.S. Securities and Exchange Commission. The Debt Securities are “exempted=20 securities” within the meaning of the Securities Exchange=20 Act of 1934, as amended. Neither the U.S. Securities and=20 Exchange Commission nor any state securities commission has=20 approved or disapproved these Debt Securities or determined if=20 this Offering Circular, any Pricing Supplement or any other=20 supplement or amendment is truthful or complete. Any=20 representation to the contrary is a criminal offense.

We may not distribute this Offering Circular, any Pricing=20 Supplement or any other supplement in the United Kingdom to any=20 person unless that person is of a kind described in=20 Article 11(3) of the Financial Services Act 1986=20 (Investment Advertisements) (Exemptions) Order 1996, as amended,=20 or is a person to whom we may otherwise lawfully issue or=20 distribute this Offering Circular, any Pricing Supplement or any other supplement. We have not registered the Debt Securities=20 under the Securities and Exchange Law of Japan, and we may not=20 make offers and sales, direct or indirect, of Debt Securities in=20 Japan or to any resident of Japan or to any person for=20 reoffering or resale, directly or indirectly, in Japan or to any=20 resident of Japan except in compliance with, or pursuant to an=20 exemption from, the registration requirements of the Securities=20 and Exchange Law available thereunder and in compliance with=20 other relevant laws of Japan. For a further description of=20 restrictions on offers, sales and deliveries of the Debt=20 Securities and on the distribution of this Offering Circular,=20 any Pricing Supplement or any other supplement hereto, see=20 “Plan of Distribution—Selling Restrictions” and=20 Appendix E.

The distribution of this Offering Circular, any Pricing=20 Supplement or any other supplement and the offer, sale, and=20 delivery of Debt Securities in certain jurisdictions may be=20 restricted by law. Persons who come into possession of this=20 Offering Circular, any Pricing Supplement or any other=20 supplement must inform themselves about and observe any=20 applicable restrictions.

This Offering Circular, any Pricing Supplement or any other=20 supplement is not an offer to sell or a solicitation of an offer=20 to buy any securities other than the Debt Securities or an offer to sell or a solicitation of an offer to buy Debt Securities in=20 any jurisdiction or in any other circumstance in which an offer=20 or solicitation is unlawful or not authorized.

When we offer Debt Securities other than Benchmark Bills or=20 Short-Term Notes, we will provide you with a “Pricing=20 Supplement” describing the terms of the specific issue of=20 Debt Securities, including the offering price. The Pricing=20 Supplement also may amend or supplement this Offering Circular=20 with respect to a specific issue of Debt Securities. You should=20 read the Pricing Supplement and any other applicable supplement=20 together with this Offering Circular.

This summary highlights information contained elsewhere in=20 this Offering Circular, including in the Appendices. It does not=20 contain all of the information you should consider before=20 investing in the Debt Securities. You also should read the more=20 detailed information in this Offering Circular and any=20 applicable supplement, including any Pricing Supplement for a=20 particular issue of Debt Securities. This Offering Circular sets=20 forth the general terms of the Debt Securities; the applicable=20 Pricing Supplement will describe the particular terms of any=20 issue of Debt Securities (other than Benchmark Bills and=20 Short-Term Notes), and the extent, if any, that any of the=20 general terms will not apply to particular Debt Securities. You=20 should read Appendix B for more specific information=20 regarding Benchmark Bills and Short-Term Notes and=20 Appendix C for more specific information regarding=20 Subordinated Benchmark Notes and other Subordinated Debt=20 Securities.

Fannie Mae is a federally chartered and stockholder-owned=20 corporation organized and existing under the Federal National=20 Mortgage Association Charter Act. We are the largest investor in=20 home mortgage loans in the United States. We were established in=20 1938 as a United States government agency to provide=20 supplemental liquidity to the mortgage market and were=20 transformed into a stockholder-owned and privately managed=20 corporation by legislation enacted in 1968.

This section describes the principal risks with respect to the=20 Debt Securities. There may be other risks not discussed below or=20 discussed in a supplement to this Offering Circular that you=20 should consider. These risks depend on a number of factors,=20 including financial, economic and political events, that are=20 beyond our control.

As a potential investor in the Debt Securities, you must=20 determine the suitability of that investment in light of your=20 own circumstances.


	•	You should have sufficient knowledge and experience to make a=20 meaningful evaluation of the Debt Securities, the merits and=20 risks of investing in the Debt Securities and the information=20 contained or incorporated by reference in this Offering Circular=20 or any applicable supplement.

	•	You should have access to, and knowledge of, appropriate=20 analytical tools to evaluate, in the context of your particular=20 financial situation, an investment in the Debt Securities and=20 the impact the Debt Securities will have on your overall=20 investment portfolio.

	•	You should have sufficient financial resources and liquidity to=20 bear all of the risks of an investment in the Debt Securities,=20 including Debt Securities with principal or interest payable in=20 one or more currencies, or where the currency for principal or=20 interest payments is different from your currency.

	•	You should understand thoroughly the terms of the Debt=20 Securities and be familiar with the behavior of relevant indices=20 and financial markets.

	•	You should be able to evaluate (either alone or with the help of=20 a financial advisor) possible scenarios for economic, interest=20 rate and other factors that may affect your investment and your=20 ability to bear the applicable risks.

Some Debt Securities are complex financial instruments.=20 Sophisticated institutional investors generally do not purchase=20 complex Debt Securities as stand-alone investments. They=20 purchase complex Debt Securities as a way to reduce risk or=20 enhance yield with an understood, measured, appropriate addition=20 of risk to their overall portfolios. You should not invest in=20 complex Debt Securities unless you have the expertise (either=20 alone or with a financial advisor) to evaluate how the Debt=20 Securities will perform under changing conditions, the resulting=20 effects on their value and the impact this investment will have=20 on your overall investment portfolio.

Risks Related to the Structure of a Particular = Issue of Debt=20 Securities

An optional redemption feature of Debt Securities is likely to=20 limit their market value. During any period when we may elect to=20 redeem Debt Securities, the Debt Securities’ market value=20 generally will not rise substantially above the price at which=20 we can redeem the Debt Securities. This also may be true prior=20 to any redemption period.

We may be expected to redeem Debt Securities when our cost of=20 borrowing is lower than the interest rate on the Debt=20 Securities. At those times, you generally would not be able to=20 reinvest the redemption proceeds at an effective interest rate=20 as high as the interest rate on the Debt Securities being=20 redeemed. The reinvestment may be at a significantly lower rate.=20 You should consider reinvestment risk in light of other=20 investments available at that time.

Debt Securities with Principal or Interest = Linked to an Index or Formula

We may issue Debt Securities with principal or interest=20 determined by reference to one or more interest rate indices,=20 currencies or currency units or other indices or formulas (each,=20 an “Applicable Index”). You should be aware that:


	•	the market price of a Debt Security may be very volatile,

	•	you may receive no interest,

	•	payment of principal may occur at a different time than you=20 expect,

	•	you may lose all or a substantial portion of your principal,

	•	an Applicable Index may be subject to significant fluctuations=20 that may not correlate with changes in interest rates,=20 currencies or other indices,

	•	if an Applicable Index is applied to Debt Securities in=20 conjunction with a Multiplier greater than one or contains some=20 other leverage factor, the effect of changes in the Applicable=20 Index on principal or interest payable likely will be magnified,=20 and

	•	the timing of changes in an Applicable Index may affect your=20 actual yield, even if the average level is consistent with your=20 expectations. In general, the earlier the change in the=20 Applicable Index, the greater the effect on yield.

Fannie Mae’s Obligations under = Subordinated Debt=20 Securities are Subordinated

Fannie Mae’s obligations under Subordinated Debt Securities=20 will be issued under Section 304(e) of the Charter Act.=20 Subordinated Debt Securities will be unsecured and subordinated=20 and will rank junior in priority of payment to our “Senior=20 Liabilities”. “Senior Liabilities” means all existing and future liabilities of Fannie Mae, other than=20 liabilities that by their terms expressly rank equal with or=20 junior to Subordinated Debt Securities. Senior Liabilities=20 include, but are not limited to, debt obligations issued under=20 Section 304(b) of the Charter Act, liabilities in respect=20 of our guarantees on mortgage-backed securities and our 9%=20 Capital Debentures due 2019 and Zero Coupon Capital Debentures=20 due 2019 (together, the “Outstanding Capital=20 Debentures”). We cannot make any payments of principal of=20 or interest on the Subordinated Debt Securities if we default on=20 any Senior Liabilities. See “Description of the Debt=20 Securities—Special Terms Relating to Subordinated Debt=20 Securities” and Appendix C. In the event of a=20 liquidation or dissolution of Fannie Mae, our assets would be=20 available to pay obligations under the Subordinated Debt=20 Securities only after all payments had been made of amounts then=20 due in respect of all Senior Liabilities.

Under Certain Conditions, Interest Payments = under Fannie=20 Mae’s Subordinated Debt Securities Must be Deferred

If (1) our core capital is below 125% of our critical=20 capital requirement, or (2)(a) our core capital is below=20 our minimum capital requirement, and (b) the U.S. Secretary of=20 the Treasury, acting on our request, exercises his or her=20 discretionary authority under Section 304(c) of the Charter=20 Act to purchase our debt obligations, then we must defer the=20 payment of interest on the Subordinated Debt Securities for=20 periods not to exceed five years. (The U.S. Secretary of the=20 Treasury has discretionary authority to purchase obligations of=20 Fannie Mae up to a maximum of $2.25 billion outstanding at=20 any one time). See “Description of the Debt=20 Securities—Interest” and Appendix C of this=20 Offering Circular.

We will pay all deferred interest, and interest on that deferred=20 interest, on all Subordinated Debt Securities as soon as, after=20 giving effect to such payments, we no longer would be required=20 to defer interest under the terms described above, and we have=20 repaid all debt obligations, if any, purchased by the U.S.=20 Secretary of the Treasury as described above. We will make this=20 payment in respect of all Subordinated Debt Securities on the=20 next scheduled Interest Payment Date that occurs in respect of=20 any issue of Subordinated Debt Securities, unless we elect to=20 make the payment earlier.

If we have not resumed interest payments on an issue of=20 Subordinated Debt Securities by their Maturity Date or have=20 deferred interest on an issue of Subordinated Debt Securities=20 for five consecutive years, then we must pay deferred interest,=20 and interest on that deferred interest, on that issue of=20 Subordinated Debt Securities regardless of our capital levels or=20 our repayment of all debt obligations purchased by the U.S.=20 Secretary of the Treasury. Even if we are required to make any=20 payment on Subordinated Debt Securities, because Subordinated=20 Debt Securities are subordinated, Holders of Subordinated Debt=20 Securities will be entitled to receive payments only after we=20 have made payment in full of all amounts then due in respect of=20 all Senior Liabilities. In no event will Holders of Subordinated=20 Debt Securities be able to accelerate the maturity of their=20 Subordinated Debt Securities; such Holders will have claims only=20 for amounts then due and payable on their Subordinated Debt=20 Securities. After we have fully paid all deferred interest on=20 any issue of Subordinated Debt Securities and if that issue of=20 Subordinated Debt Securities remains outstanding, future=20 interest payments on that issue of Subordinated Debt Securities=20 will be subject to further deferral as described above.

Upon the deferral of interest payments, you generally will be=20 required to accrue income, for United States federal income tax=20 purposes, in respect of the accrued but unpaid interest on=20 Subordinated Debt Securities held by you. As a result, you=20 generally will recognize income for United States federal income=20 tax purposes in advance of the receipt of payment. Additionally,=20 you will not receive payment of that interest if you dispose of=20 your Subordinated Debt Securities prior to the record date for=20 the payment of accrued interest. See “United States=20 Taxation”.

Any deferral of interest payments will likely have an adverse=20 effect on the market price of the Subordinated Debt Securities.=20 In addition, as a result of the interest deferral provision of=20 the Subordinated Debt Securities, the market price of the=20 Subordinated Debt Securities may be more volatile than the=20 market prices of other debt securities on which original issue=20 discount or interest accrues that are not subject to such=20 deferrals and may be more sensitive generally to adverse changes=20 in Fannie Mae’s financial condition.

Debt Securities may have no established trading market when=20 issued, and one may never develop. If a market does develop, it=20 may not be very liquid. Therefore, you may not be able to sell=20 your Debt Securities easily or at prices that will provide you=20 with a yield comparable to similar investments that have a=20 developed secondary market. This is particularly the case for=20 Debt Securities that are especially sensitive to interest rate,=20 currency or market risks, are designed for specific investment=20 objectives or strategies or have been structured to meet the=20 investment requirements of limited categories of investors.=20 These types of Debt Securities generally would have a more=20 limited secondary market and more price volatility than=20 conventional debt securities. Illiquidity may have a severely=20 adverse effect on the market value of Debt Securities.

Variable Rate Securities can be volatile investments. If they=20 are structured to include multipliers or other leverage factors,=20 or caps or floors, or any combination of those features, their=20 market values may be even more volatile than comparable=20 securities that do not include those features.

Inverse Variable Rate Securities have an interest rate equal to=20 a fixed rate minus a rate based upon an Applicable Index. The=20 market values of inverse Variable Rate Securities typically are=20 more volatile than market values of our conventional variable=20 rate debt securities based on the same Applicable Index (and=20 with otherwise comparable terms). Inverse Variable Rate=20 Securities are more volatile because an increase in the=20 Applicable Index not only decreases the interest rate of the=20 Debt Security, but also reflects an increase in prevailing=20 interest rates, which further adversely affects the market value=20 of these Debt Securities.

Fixed/Variable Rate Securities may bear interest at a rate that we may elect to convert from a fixed rate to a variable rate, or=20 from a variable rate to a fixed rate. Our ability to convert the=20 interest rate will affect the secondary market and the market=20 value of the Debt Securities since we may be expected to convert=20 the rate when it is likely to produce a lower overall cost of=20 borrowing. If we convert from a fixed rate to a variable rate,=20 the Spread on the fixed/variable rate securities may be less=20 favorable than then prevailing spreads on our comparable=20 variable rate debt securities tied to the same Applicable Index.=20 In addition, the new variable rate at any time may be lower than=20 the rates on other Debt Securities. If we convert from a=20 variable rate to a fixed rate, the fixed rate may be lower than=20 then prevailing rates on our Debt Securities.

Some issues of Fixed Rate Securities and Step Rate Securities=20 will be eligible to be separated (“stripped”) into=20 Interest Components and Principal Components. The secondary=20 market, if any, for the Components may be more limited and have=20 less liquidity than the secondary market for Debt Securities of=20 the same issue that have not been stripped. The liquidity of an=20 issue of Debt Securities also may be reduced if a significant=20 portion of the Debt Securities are stripped. See=20 “Description of the Debt Securities—Eligibility for=20 Stripping of Fed Book-Entry Securities” for more=20 information on stripping.

The market values of securities issued at a substantial discount=20 or premium from their principal amount tend to fluctuate more in=20 relation to general changes in interest rates than do prices for=20 conventional interest-bearing securities. Generally, the longer=20 the remaining term of the securities, the greater the price=20 volatility as compared to conventional interest-bearing=20 securities with comparable maturities. The market values of=20 Benchmark Bills, Short-Term Notes, Zero-Coupon Securities,=20 Interest Components and some Principal Components would be=20 expected to behave this way.

As mentioned above, principal of or interest on Debt Securities=20 may be determined by reference to one or more currencies or=20 currency units (including exchange rates and swap indices=20 between currencies or currency units). Government and monetary=20 authorities may impose (as some have done in the past) exchange=20 controls that could adversely affect an applicable exchange=20 rate. As a result, you may receive less interest or principal=20 than you expected, or no interest or principal.

We will pay principal and interest on the Debt Securities in the=20 Specified Payment Currency. See “Description of the Debt=20 Securities—Specified Currencies and Specified Payment=20 Currencies.” This presents certain risks relating to=20 currency conversions if your financial activities are=20 denominated principally in a currency or currency unit=20 (“Your Currency”) other than the Specified Payment=20 Currency. These include the risk that exchange rates may=20 significantly change (including changes due to devaluation of=20 the Specified Payment Currency or revaluation of Your Currency)=20 and the risk that authorities with jurisdiction over Your=20 Currency may impose or modify exchange controls. An appreciation in the value of Your Currency relative to the Specified Payment Currency would decrease (1) Your Currency-equivalent yield on the Debt Security, (2) Your Currency-equivalent value of the principal payable on the Debt Security, and (3) Your Currency-equivalent market value of the Debt Security.

As mentioned above, government or monetary authorities may=20 impose exchange controls that could adversely affect an=20 applicable exchange rate. Even if there are no actual exchange=20 controls, it is possible that the Specified Payment Currency for=20 a particular Debt Security may no longer be used by the=20 government issuing the Specified Payment Currency or used for=20 settlement of transactions by public institutions of or within=20 the international banking community, or that the Specified=20 Payment Currency may not be available for any other reason when=20 payments on the Debt Security are due. If the government that=20 previously issued the Specified Payment Currency has issued a=20 new legal currency, we will make payments in that new legal=20 currency. If there is no new legal currency or the Specified=20 Payment Currency is unavailable due to circumstances beyond our=20 control (such as exchange controls), we will make payments in=20 U.S. dollars.

The investment activities of certain investors are subject to=20 legal investment laws and regulations, or review or regulation=20 by certain authorities. You should consult your legal advisors=20 to determine whether and to what extent (1) Debt Securities=20 are legal investments for you, (2) Debt Securities can be=20 used as collateral for various types of borrowing and (3) other=20 restrictions apply to your purchase or pledge of any Debt=20 Security. Financial institutions should consult their legal=20 advisors or the appropriate regulators to determine the=20 appropriate treatment of Debt Securities under any applicable=20 risk-based capital or similar rules.

If you are subject to the jurisdiction of any of the following=20 agencies of the United States or a governmental agency of the=20 United States or any jurisdiction outside the United States with=20 similar authority (for example, central banks), you should=20 review and consider that regulator’s rules, guidelines,=20 regulations and policy statements prior to purchasing or=20 pledging Debt Securities:


	•	The Board of Governors of the Federal Reserve System

	•	The Comptroller of the Currency

	•	The Federal Deposit Insurance Corporation

	•	The National Credit Union Administration

	•	The Office of Thrift Supervision

One or more independent credit rating agencies may assign credit=20 ratings to Debt Securities. The ratings may not reflect the=20 potential impact of all risks related to structure, market,=20 additional factors discussed above, and other factors that may=20 affect the value of the Debt Securities.

The description set forth below contains general provisions=20 that apply to all Debt Securities, except as otherwise specified=20 in this Offering Circular or a supplement to it. You should read=20 Appendix B for a detailed description of Benchmark Bills=20 and Short-Term Notes and Appendix C for a detailed=20 description of Subordinated Benchmark Notes and other=20 Subordinated Debt Securities, in particular for those provisions that, as noted below, differ from the following provisions. We=20 will not prepare a Pricing Supplement for Benchmark Bills and=20 other Short-Term Notes.

We may issue an unlimited amount of Debt Securities from time to=20 time under the Universal Debt Facility. The Debt Securities may=20 be issued as:


	•	Benchmark Securities, which are U.S. dollar denominated, regularly scheduled issues in large principal amounts. See Appendix A for a general description of our Benchmark Securities program. Our current Benchmark Securities are:


	•	Benchmark Bills—non-callable Debt Securities with maturities of 360 days or less and sold at a discount from their principal amount payable at maturity

	•	Benchmark Notes—non-callable Debt Securities with maturities of one to ten years

	•	Callable Benchmark Notes—callable Debt Securities with maturities of one to ten years

	•	Benchmark Bonds—non-callable Debt Securities with maturities of more than ten years

	•	Subordinated Benchmark Notes—non-callable Subordinated Debt Securities with maturities of one to ten years


	•	We may issue other Debt Securities, denominated in U.S. dollars or other currencies, with maturities of one day or longer. These Debt Securities will have various terms, as described in this Offering Circular and any applicable Pricing Supplement, and will be:


	•	Short-Term Notes—non-callable Debt Securities with maturities of 360 days or less and which may be sold at a discount from their principal amount payable at maturity or may be interest-bearing

	•	Notes—callable or non-callable Debt Securities with maturities of one to ten years

	•	Bonds—callable or non-callable Debt Securities with maturities of more than ten years

We will sell Debt Securities in one or more issues consisting of Debt Securities having (as applicable) the same interest rate or formula, Interest Payment Dates, Maturity Date, redemption provisions, amortization provisions, denominations and other variable terms referred to below.


	•	on the book-entry system of the U.S. Federal Reserve Banks=20 (“Fed Book-Entry Securities”) or

	•	in registered global form (“Global Book-Entry=20 Securities”).

Except under the limited circumstances described under=20 “Description of the Debt Securities—Exchange of=20 Global Book-Entry Securities for Definitive Debt=20 Securities,” Debt Securities will not be available in=20 definitive form. We will establish terms of issues of Fed=20 Book-Entry Securities pursuant to a “Statement of=20 Terms.”

Fed Book-Entry Securities other than Benchmark Bills and=20 Short-Term Notes will be issued under the Fiscal Agency=20 Agreement dated as of April 23, 1974, as amended or=20 supplemented, between us and the U.S. Federal Reserve Banks,=20 collectively acting as the Fiscal Agent. Global Book-Entry=20 Securities will be issued under the Global Agency Agreement,=20 dated as of December 21, 1999, as it may be amended or=20 supplemented, between us and The Chase Manhattan Bank, as Global=20 Agent. Benchmark Bills and Short-Term Notes that are Fed=20 Book-Entry Securities will be issued under the Short-Term Note=20 Fiscal Agency Agreement dated as of January 2, 1969, as=20 amended or supplemented, between us and the Federal Reserve Bank=20 of New York. Statements under this heading and in Pricing=20 Supplements are subject to the detailed provisions of=20 (1) any applicable Statement of Terms or other document=20 establishing the terms of an issue of Fed Book-Entry Securities=20 and the applicable Fiscal Agency Agreement or (2) the=20 Global Book-Entry Securities and the Global Agency Agreement.

You can review copies of any applicable Statement of Terms or=20 other document establishing the terms of an issue of Fed=20 Book-Entry Securities, the Fiscal Agency Agreement and the=20 Short-Term Note Fiscal Agency Agreement at our principal office=20 in Washington, D.C. You also can review a copy of the Fiscal=20 Agency Agreement and the Short-Term Note Fiscal Agency Agreement=20 at the Federal Reserve Bank of New York, 33 Liberty Street,=20 New York, New York 10045. You can review a copy of the Global=20 Agency Agreement at our principal office in Washington, D.C.,=20 the principal U.S. corporate trust office of the Global Agent at=20 450 West 33rd Street, 15th Floor, New York, New York 10001-2697,=20 and at Banque Internationale à Luxembourg S.A. at 69, route=20 d’Esch, L-2953 Luxembourg. You can review a copy of the=20 terms of any Global Book-Entry Securities at the same corporate=20 trust office of the Global Agent.

Fed Book-Entry Securities will be denominated and payable only=20 in U.S. dollars. Appendix B contains provisions relating to=20 Short-Term Notes denominated and payable in a Specified=20 Currency. We will set forth in the applicable Pricing Supplement=20 any provisions relating to any non-U.S. dollar currency or=20 currency unit (each a “Specified Currency”) in which=20 any other Debt Security may be denominated or in which payments=20 on such Debt Security may be made.

Except as described below, we will make interest payments in the=20 Specified Currency designated for interest payments and=20 principal payments in the Specified Currency designated for=20 principal payments. (We refer to the specified interest currency=20 and specified principal currency collectively in this Offering=20 Circular as the “Specified Payment Currency.”)=20 However, for Global Book-Entry Securities issued through DTC=20 that are denominated and payable in a Specified Payment Currency=20 other than U.S. dollars, we will make arrangements for the=20 conversion of any payment in a non-U.S. dollar currency into=20 U.S. dollars unless a Holder elects to receive payments in the=20 Specified Payment Currency. We understand that Euroclear and=20 Clearstream, unless specifically requested not to do so=20 15 days before the applicable Interest Payment Date or=20 Principal Payment Date, will receive all payments of principal=20 and interest for such Global Book-Entry Securities held through=20 them in the applicable Specified Payment Currency if it is other=20 than U.S. dollars. See “Description of the Debt=20 Securities—Currency Conversions—Payment for Debt=20 Securities.”

It is possible that the Specified Payment Currency for a=20 particular Debt Security may no longer be used by the government=20 issuing the Specified Payment Currency or used for settlement of=20 transactions by public institutions of or within the=20 international banking community, or that the Specified Payment=20 Currency may not be available for any other reason, when=20 payments on the Debt Security are due. If the government that=20 previously issued the Specified Payment Currency has issued a=20 new legal currency, we will make payments in that new legal=20 currency. If there is no new legal currency or the Specified=20 Payment Currency is unavailable due to circumstances beyond our=20 control, such as exchange controls, we will make payments in=20 U.S. dollars. In addition, in the circumstances and on the terms=20 described in Appendix F, Debt Securities originally=20 denominated in currencies expected to be replaced by the Euro=20 may be redenominated to Euro.

We will issue Debt Securities in minimum denominations of U.S.=20 $1,000 original principal amount and additional increments of=20 U.S. $1,000 original principal amount, or other denominations=20 that we specify in the applicable Pricing Supplement (or, with=20 respect to Benchmark Bills and Short-Term Notes, in=20 Appendix B). We will express denominations of Zero-Coupon=20 Securities in terms of the principal amount payable on the=20 Maturity Date.

Debt Securities originally denominated in a currency that is=20 issued by a member state of the European Union that adopts the=20 Euro as its single currency may be redenominated to the Euro.=20 Provisions relating to redenomination are set forth in=20 Appendix F.

We may issue additional Debt Securities with the same terms as=20 previously issued Debt Securities (other than the date of=20 issuance, interest commencement date and offering price, which=20 may vary) that will form a single issue with the previously=20 issued Debt Securities. This type of offering often is referred=20 to as a “reopening”. We may issue additional Debt=20 Securities in this manner from time to time and without the=20 consent of any Holder of a Debt Security.

Each Debt Security will mature on a date (the “Maturity=20 Date”) one day or longer from its issue date, unless=20 redeemed prior to that date. The Maturity Date for any Benchmark=20 Bill or Short-Term Note will be 360 days or less from the=20 date of its issuance. We will specify the Maturity Date for=20 other Debt Securities in the applicable Pricing Supplement.

The principal amount payable on the Maturity Date of a Debt=20 Security will be either:


	•	a fixed principal repayment amount equal to 100% of the=20 outstanding principal amount, or a specified amount above or=20 below the principal amount; or

	•	a variable principal repayment amount determined by reference to one or more interest rate or exchange rate indices, or otherwise.

Benchmark Bills and most Short-Term Notes will not bear interest but will be issued at a discount to their principal amount payable at maturity. Other Debt Securities may bear interest at one or more fixed rates or variable rates or may not bear interest. We will specify in the applicable Pricing Supplement whether these other Debt Securities are Fixed Rate Securities, Step Rate Securities, Variable Rate Securities, Fixed/Variable Rate Securities or Zero-Coupon Securities.


	•	“Fixed Rate Securities” are Debt Securities that bear interest at a fixed rate.

	•	“Step Rate Securities” are Debt Securities that bear interest at specified fixed rates for specified periods.

	•	“Variable Rate Securities” are Debt Securities that bear interest at a variable rate determined by reference to one or more interest rate indices, or otherwise. A detailed discussion of how rates are calculated is set forth below under “—Variable Interest Rates.”

	•	“Fixed/Variable Rate Securities” are Debt Securities that bear interest at a fixed rate for one or more periods and at a variable rate for one or more other periods or Debt Securities that bear interest at a rate that we may elect to convert from a fixed rate to a variable rate or from a variable rate to a fixed rate.

	•	“Zero-Coupon Securities” are Debt Securities that do not bear interest and are issued at a discount to their principal amount payable at maturity.

You can obtain the current interest rate on Variable Rate Securities and Fixed/Variable Rate Securities from Fannie Mae by accessing our World Wide Web site at www.fanniemae.com or=20 calling (800) 701-4791 (for international callers,=20 (202) 752-5499). We may discontinue providing this=20 information at any time without notice. If the rules of the=20 Luxembourg Stock Exchange so require, the Calculation Agent will=20 provide certain interest rate information on Variable Rate=20 Securities listed on the exchange to the Luxembourg Stock=20 Exchange within two Business Days of having determined the=20 information.

Descriptions of interest rate indices that may be used with=20 respect to Variable Rate Securities or Fixed/Variable Rate=20 Securities are contained in Appendix D to this Offering=20 Circular.

We will specify in the applicable Pricing Supplement when=20 interest will be paid on the related Debt Securities. We will=20 pay interest in arrears on the Interest Payment Dates specified=20 for the Debt Securities (each an “Interest Payment=20 Date”) and on the Principal Payment Date.

Each issue of interest-bearing Debt Securities will bear=20 interest from and including the most recent Interest Payment=20 Date or, if no interest has been paid or made available for=20 payment on that issue of Debt Securities, from and including the=20 issue date of the Debt Securities (or any other date we may=20 specify for the Debt Securities) to but excluding the next=20 applicable Interest Payment Date or the applicable Principal=20 Payment Date. In this Offering Circular, we refer to each of=20 these periods as an “Interest Period.”

In this Offering Circular, we refer to the Maturity Date or any=20 earlier date of redemption or principal repayment of an issue of=20 Debt Securities as the “Principal Payment Date” with=20 respect to the principal repayable on that date. No interest on=20 the principal repaid will accrue on or after the Principal=20 Payment Date.

Interest on any Debt Security accrues on the then outstanding=20 principal amount. Payments on Debt Securities will be rounded,=20 in the case of U.S. dollars, to the nearest cent or, in the case=20 of a Specified Payment Currency other than U.S. dollars, to the=20 nearest smallest transferable unit (with one-half cent or unit=20 rounded upwards).

The terms of our Subordinated Debt Securities will require=20 interest to be deferred for periods of up to five years under=20 certain circumstances. See Appendix C for more information=20 about this interest deferral feature of our Subordinated Debt=20 Securities.

If any jurisdiction imposes a withholding or other tax on a=20 payment on any Debt Security, we will not be obligated to pay=20 additional interest or other amounts, or to redeem the Debt=20 Securities prior to maturity.

Interest rates or yields with respect to Debt Securities may=20 differ depending upon, among other things, the principal amount=20 of Debt Securities the applicable Dealer expects to sell to an=20 investor in a single transaction and the price at which the=20 Dealer purchases the Debt Securities from us (or, in connection=20 with sales on a non-underwritten basis, the Dealer’s=20 commission).

Debt Securities that have a variable interest rate component may=20 bear interest at a variable rate determined by reference to one=20 or more interest rate indices, or otherwise, (1) plus or=20 minus a Spread, if any, or (2) multiplied by a Multiplier, if=20 any. We will specify the applicable interest rate index and any=20 Spread or Multiplier in the Pricing Supplement for an issue of=20 Debt Securities with a variable interest rate component. Debt=20 Securities also may bear interest in any other manner described=20 in the applicable Pricing Supplement.

“Spread” means a constant or variable amount to be=20 added to or subtracted from the relevant index.=20 “Multiplier” means a constant or variable number=20 (which may be greater or less than 1) by which the relevant=20 index will be multiplied. “Index Maturity” means the=20 period to maturity of the instrument or obligation as to which=20 the relevant index will be calculated.

Debt Securities with a variable interest rate component also may=20 have either or both of the following:


	•	a maximum interest rate limitation, or “cap,” on the=20 rate at which interest may accrue during any Interest Reset=20 Period

	•	a minimum interest rate limitation, or “floor,” on the=20 rate at which interest may accrue during any Interest Reset=20 Period.

In addition, in no event will the effective rate of interest=20 (determined on the basis of the actual number of days in the=20 period and in the year) exceed 24% per annum for any Interest=20 Reset Period, regardless of the accrual method used to compute=20 interest on the Debt Security.

We will specify in the applicable Pricing Supplement how=20 frequently the rate of interest will reset, which may be daily,=20 weekly, monthly, quarterly, semiannually, annually or any other=20 frequency. We also will specify in the applicable Pricing=20 Supplement the effective dates for new rates of interest,=20 subject to the following sentence (each a “Reset=20 Date”). If the interest rate will reset within an Interest=20 Period, then:


	•	the interest rate in effect on the sixth Business Day preceding=20 an Interest Payment Date or the Principal Payment Date will be=20 the interest rate for the remainder of that Interest Period, and

	•	the first day of each Interest Period also will be a “Reset Date.” (Debt Securities may bear interest prior to the=20 initial Reset Date at an initial interest rate specified in the=20 applicable Pricing Supplement. If so, then the first day of the=20 initial Interest Period will not be a Reset Date).

Each period beginning on the applicable Reset Date and ending on=20 the day preceding the next Reset Date is an “Interest Reset=20 Period.” During each Interest Reset Period:


	•	If the Federal Funds Rate (Weekly Average) is an applicable=20 interest rate index for a Debt Security, the rate of interest=20 for each day in an Interest Reset Period will be determined as=20 of a date indicated in Appendix D under “Federal Funds=20 Rates—Federal Funds Rate (Weekly Average).”

	•	If the Treasury Bill Rate is an applicable interest rate index=20 for a Debt Security, the rate of interest for each day in an=20 Interest Reset Period will be determined as of a date indicated=20 in Appendix D under “Treasury Bill Rate.”

	•	For all other interest rate indices, the rate of interest for=20 each day in an Interest Reset Period will be determined as of=20 the applicable Determination Date. The “Determination=20 Date” will be:


	•	for LIBOR, the LIBOR Determination Date

	•	for EURIBOR, the EURIBOR Determination Date

	•	for the Federal Funds Rate (Daily), the applicable Reset Date

	•	for the Prime Rate, the Prime Rate Determination Date

	•	for the CMT Rate (Weekly Average), the CMT Determination Date

If the rate of interest will reset within an Interest Period,=20 accrued interest will be calculated by multiplying the principal=20 amount of the Debt Security by an accrued interest factor. This=20 accrued interest factor will be computed by totaling the=20 interest factors calculated for all days in the Interest Period.=20 The interest factor for each day will be computed by dividing=20 the interest rate for that day by the number of days in the year=20 referred to in the applicable accrual method.


	Example. An interest rate of 3.12345% would be expressed=20 in decimal format as .0312345. Assuming a year of 360 days,=20 the applicable interest rate would be calculated by dividing=20 .0312345 by 360 resulting in an interest factor of .0000868 for=20 one day.

In calculating the interest rate, all numbers will be expressed=20 as a decimal and rounded to the seventh digit after the decimal=20 point. (If the eighth digit to the right of the decimal point is=20 five or greater, the seventh digit will be rounded up by one.)


	Example. 3.123445% would be expressed as 0.03123445,=20 which would be rounded to 0.0312345 (which is equivalent to=20 3.12345%).

Numbers subject to this rounding convention include all value=20 inputs into indexing formulas, intermediate calculations,=20 numbers resulting from any calculation, interest rates, interest=20 factors and accrued interest factors.

If the format of a page, screen, display, press release or other=20 source related to an index to be used in determining the rate of=20 interest on a Debt Security changes but, in the discretion of=20 the Calculation Agent, the source continues to disclose the=20 information necessary to determine the rate substantially as=20 described in this section or in the applicable Pricing=20 Supplement, then the procedure for obtaining information from=20 the source shall be deemed to be amended as determined by the=20 Calculation Agent.

We will specify the applicable interest rate index in the=20 Pricing Supplement for an issue of Debt Securities. Only the=20 provisions contained in Appendix D under the heading of the=20 specified interest rate index will apply to the related Debt=20 Securities.

The Calculation Agent’s determination of the interest rate=20 will be final and binding on all parties, absent manifest error.=20 The “Calculation Agent” will be Fannie Mae or a bank=20 or broker-dealer that we designate. We will be the initial=20 Calculation Agent unless we specify otherwise in the applicable=20 Pricing Supplement.

If the rules of the Luxembourg Stock Exchange so require, the=20 Calculation Agent will provide to the exchange the interest=20 rate, the amount of interest payable on the next Interest=20 Payment Date and the dates of the current Interest Period with=20 respect to Variable Rate Securities listed on such exchange, no=20 later than the first day of each new Interest Period.

We may issue Debt Securities on which there are periodic=20 payments of principal during the term of the Debt Securities=20 (“Amortizing Securities”). Amortizing Securities may=20 bear interest at fixed or floating rates. We will describe in=20 the Pricing Supplement for an Amortizing Note how interest will=20 be calculated and how principal will be paid.

We may issue Debt Securities on which the amount of principal or=20 interest (or both) payable will be determined by reference to=20 the price or prices of specified commodities or stocks, to the=20 exchange rate of one or more currencies or currency units=20 (including swap indices between currencies or currency units)=20 relative to one or more other currencies or currency units, to=20 other prices or exchange rates, or in any other manner described=20 in the Pricing Supplement (“Indexed Securities”). The=20 Pricing Supplement will describe the method for determining the=20 amount of principal and interest, if any, payable on Indexed=20 Securities. In no event, however, will the effective rate of=20 interest (determined on the basis of the actual number of days=20 in the period and in the year) on an Indexed Security that bears=20 interest at a floating rate exceed 24% per annum for any=20 Interest Reset Period, regardless of the accrual method used to=20 compute interest on the Indexed Security.

Each interest-bearing Debt Security will have an accrual method=20 (i.e., day count convention) for calculating interest or=20 any other relevant accrual factor on the related Debt=20 Securities, which may incorporate one or more of the following=20 methods. The numbers in the denominators of each term refer to=20 the number of days in a year or an assumed year, as applicable.


	•	“30/ 360” means a calculation on the basis of a=20 360-day year consisting of twelve 30-day months

	•	“Actual/ 360” means a calculation on the basis of the=20 actual number of days elapsed divided by 360

	•	“Actual/ 365 (Fixed)” means a calculation on the basis=20 of the actual number of days elapsed divided by 365, regardless=20 of whether accrual or payment occurs during a leap year

	•	“Actual/ Actual (Accrual Basis)” means a calculation=20 on the basis of the actual number of days elapsed divided by=20 365, or 366 if the day for which interest is being calculated=20 falls in a leap year

	•	“Actual/ Actual (Payment Basis)” means a calculation=20 on the basis of the actual number of days elapsed divided by=20 365, or 366 if the applicable Interest Payment Date falls in a=20 leap year

The accrual method for Fixed-Rate Securities, Step Rate=20 Securities and the fixed-rate component of Fixed/ Variable Rate=20 Securities will be “30/360” unless we specify=20 otherwise in the applicable Pricing Supplement. We will specify=20 the accrual method for other Debt Securities in the applicable=20 Pricing Supplement.

If an Interest Payment Date or Principal Payment Date is not a=20 Business Day, we will pay the interest or principal on the next=20 Business Day. In that case, you will receive no interest on the=20 delayed interest or principal payment for the period from and=20 after the scheduled Interest Payment Date or Principal Payment=20 Date to the actual date of payment.


	•	a Saturday,

	•	a Sunday,

	•	a day on which the Federal Reserve Bank of New York is closed, or

	•	with respect to any required payment, a day on which the U.S.=20 Federal Reserve Bank maintaining the book-entry account relating=20 to the Fed Book-Entry Security is closed.

For Global Book-Entry Securities, “Business Day” means=20 any day other than:


	•	a Saturday,

	•	a Sunday,

	•	a day on which banking institutions are closed in New York, New=20 York,

	•	a day on which banking institutions are closed in the Principal=20 Financial Center of the country issuing the Specified Payment=20 Currency (in the case where the Specified Payment Currency is=20 other than U.S. dollars or Euro), or

	•	a day on which the Trans-European Automated Real-time Gross=20 Settlement Express Transfer (“TARGET”) System is not=20 operating (in the case where the Specified Currency is Euro,=20 whether or not pursuant to redenomination).

“Principal Financial Center” means the capital city of=20 the country issuing the Specified Payment Currency, except that=20 with respect to U.S. dollars, Australian dollars, British pounds=20 sterling, Canadian dollars, Hong Kong dollars and Swiss francs,=20 the Principal Financial Center will be The City of New York,=20 Sydney, London, Toronto, Hong Kong, and Zurich, respectively.

The Debt Securities will not contain any provisions permitting=20 Holders to accelerate maturity of the Debt Securities upon the=20 occurrence of any default or other event.

We will issue and maintain Debt Securities as either Fed=20 Book-Entry Securities, which will be held only on the book-entry=20 system of the U.S. Federal Reserve Banks (the “Fed=20 Book-Entry System”), or Global Book-Entry Securities, which=20 will be held through the facilities of one or more other=20 depositories.

The U.S. Federal Reserve Banks, as fiscal agents for Fannie Mae,=20 will issue Fed Book-Entry Securities in book-entry form,=20 maintain book-entry accounts with respect to the Fed Book-Entry=20 Securities and make payments, on our behalf, of principal and=20 interest on the Fed Book-Entry Securities in U.S. dollars on the=20 applicable payment dates by crediting Holders’ accounts at=20 the U.S. Federal Reserve Banks.

Regulations that currently govern the use of the Fed Book-Entry=20 System for our securities issued in book-entry form and the=20 pledging and transfer of interests in the securities have been=20 adopted by the U.S. Department of Housing and Urban Development=20 and are contained in 24 CFR Part 81, Subpart H (which=20 regulations, as they may be amended from time to time or=20 replaced or supplemented by regulations adopted by any other=20 U.S. governmental body or agency, are referred to in this=20 Offering Circular as the “HUD Book-Entry=20 Regulations”). The HUD Book-Entry Regulations apply to all=20 Fed Book-Entry Securities. The HUD Book-Entry Regulations may be=20 modified, amended, supplemented, superseded, eliminated or=20 otherwise altered without the consent of any Holder of Fed Book-Entry Securities.

The accounts of Holders of Fed Book-Entry Securities also are=20 governed by applicable operating circulars and letters of the=20 U.S. Federal Reserve Banks.

We will issue Global Book-Entry Securities that are either=20 registered in the name of a nominee of The Depository Trust=20 Company (“DTC”) in New York, New York, or registered=20 in the name of the common depositary (or a nominee of the common=20 depositary) for one of the following:


	•	Euroclear Bank S.A./N.V. (“Euroclear Bank”), as=20 operator of the Euroclear System (“Euroclear”)

	•	Clearstream Banking, societé anonyme=20 (“Clearstream”)

	•	another clearing system specified in the applicable Pricing=20 Supplement

The Chase Manhattan Bank will act as the custodian for Global=20 Book-Entry Securities held by DTC and as the “Common=20 Depositary” for Global Book-Entry Securities held by=20 Euroclear and Clearstream. We will exchange Global Book-Entry=20 Securities for definitive Debt Securities only under the limited=20 circumstances described under “Description of the Debt=20 Securities—Exchange of Global Book-Entry Securities for=20 Definitive Debt Securities.”

We may designate specific issues of Fed Book-Entry Securities=20 that are Fixed Rate Securities or Step Rate Securities (the=20 “Eligible Securities”) as eligible to be separated=20 (“stripped”) into their separate Interest Components=20 and Principal Components on the book-entry records of the FRBNY.=20 We may designate Fed Book-Entry Securities as Eligible=20 Securities either at the time of original issuance or at any=20 time thereafter until the Cut-off Date (as defined below). We=20 have no obligation, however, to designate any issue of Fed=20 Book-Entry Securities as eligible to be stripped into Components.


	•	each future interest payment due on or prior to the Maturity=20 Date or, if the Eligible Security is subject to redemption or=20 principal repayment prior to the Maturity Date, the first date=20 on which the Eligible Security is subject to redemption or=20 repayment (in either case, the “Cut-off Date”) (each=20 an “Interest Component”)

	•	the principal payment plus any interest payments due after the=20 Cut-off Date (the “Principal Component”)

The initial or final interest payment on a Fed Book-Entry=20 Security, however, will not be an Interest Component if the=20 applicable Interest Period is shorter or longer than other=20 Interest Periods, based on a 360-day year consisting of twelve=20 30-day months. In that case, the initial or final interest=20 payment will remain with the Principal Component. Each Component=20 will receive a CUSIP number.

To be stripped into Components, the principal amount of the=20 Eligible Security must be in an amount that, based on the stated=20 interest rate of the Eligible Security, will produce an interest=20 payment of $1,000 or an integral multiple thereof on each=20 Interest Payment Date for the Fed Book-Entry Security. You=20 currently may find out the minimum principal amount required to=20 strip an Eligible Security by calling our Treasurer’s=20 Office at (202) 752-7916. If a Fed Book-Entry Security is=20 eligible to be stripped upon original issuance, we generally=20 will disclose in the applicable Pricing Supplement the minimum=20 principal amount required to strip the Fed Book-Entry Securities.

In some cases, Interest Components of two or more issues of Fed=20 Book-Entry Securities may be due on the same day. These Interest=20 Components may have the same or different CUSIP numbers. We=20 currently expect that most Interest Components due on the same=20 day (regardless of Fed Book-Entry Security issue) will have the=20 same CUSIP number. However, we may designate them to receive=20 different CUSIP numbers. We also may designate at any time that=20 Interest Components of issues of Fed Book-Entry Securities=20 originally issued on or after a specified time receive CUSIP=20 numbers different than Interest Components of issues of Fed=20 Book-Entry Securities originally issued prior to that time.

A Holder of an Eligible Security currently may request that the=20 Fed Book-Entry Security be separated into its Components at any=20 time from the date it becomes eligible to be stripped until the=20 Cut-off Date. The Holder must make a request for separation to=20 the FRBNY and comply with any requirements and procedures,=20 including payment of applicable fees, if any, of the FRBNY then=20 in effect.

The Components may be maintained and transferred on the=20 book-entry system of the U.S. Federal Reserve Banks in integral=20 multiples of $1,000. Payments on Components will be made in U.S.=20 dollars on the applicable payment dates (or the following=20 Business Day if payment on the related Fed Book-Entry Security=20 is or would be made on the following Business Day as described=20 above in “Description of the Debt Securities—Business=20 Day Convention” and below in “Description of the Debt=20 Securities—Payments”) by credit to the account at a=20 U.S. Federal Reserve Bank of the Holding Institutions whose=20 names appear on the book-entry records of the U.S. Federal=20 Reserve Banks as the entities to whose account the Components=20 have been deposited (“Component Holders”).

If any modification, amendment or supplement of the terms of an=20 issue of Fed Book-Entry Securities requires any consent of=20 Holders, the consent for Fed Book-Entry Securities that have=20 been stripped will be provided by the Component Holders of=20 Principal Components. Component Holders of Interest Components=20 will have no right to give or withhold consent. See=20 “Description of the Debt Securities—Modification and=20 Amendment.”

Currently, at the request of a Component Holder holding a=20 Principal Component and all applicable unmatured Interest=20 Components, the FRBNY will restore (“reconstitute”)=20 the Principal Components of a stripped Fed Book-Entry Security=20 and the applicable unmatured Interest Components (all in=20 appropriate amounts) to the Fed Book-Entry Security in fully=20 constituted form. The FRBNY charges a fee to reconstitute Fed=20 Book-Entry Securities. Generally, for purposes of reconstituting=20 a Debt Security, the Principal Component of an issue of Fed=20 Book-Entry Securities may be combined with either Interest=20 Components of that issue or Interest Components, if any, with=20 the same CUSIP numbers from other issues of Fed Book-Entry=20 Securities. Component Holders wishing to reconstitute Components=20 into a Fed Book-Entry Security also must comply with all=20 applicable requirements and procedures of the FRBNY relating to=20 the stripping and reconstitution of securities.

The preceding discussion is based on our understanding of the=20 way the FRBNY currently strips and reconstitutes securities on=20 the Fed Book-Entry System. The FRBNY may cease stripping or=20 reconstituting Eligible Securities or may change the way this is=20 done or the applicable requirements, procedures or charges at=20 any time without notice.

The Debt Securities will be unsecured general obligations of=20 Fannie Mae issued under Section 304(b) of the Charter Act=20 or unsecured subordinated obligations issued under=20 Section 304(e) of the Charter Act. Subordinated Debt=20 Securities will be issued under Section 304(e) of the=20 Charter Act. All Short-Term Notes will be issued under=20 Section 304(b) of the Charter Act. All other Debt=20 Securities will be issued under Section 304(b) of the=20 Charter Act unless we specify otherwise in the applicable=20 Pricing Supplement. The Debt Securities will not limit other=20 indebtedness or securities that we may incur or issue. The Debt=20 Securities will not contain any financial or similar=20 restrictions on us or any restrictions on our ability to secure=20 other indebtedness.

The Debt Securities, together with interest thereon, are not=20 guaranteed by the United States and do not constitute a debt or=20 obligation of the United States or of any agency or=20 instrumentality thereof other than Fannie Mae.

Debt Securities will not be issued under an indenture. There=20 will be no trustee with respect to the Debt Securities.

Fannie Mae expects to issue subordinated Debt Securities in an=20 amount such that, following a three-year phase-in period, the=20 sum of our core capital, loss allowances and outstanding=20 subordinated Debt Securities will equal or exceed four percent=20 of on-balance sheet assets, after setting aside capital=20 sufficient to support off-balance sheet mortgage-backed=20 securities. The terms of these subordinated Debt Securities also=20 will require interest to be deferred for periods of up to five=20 years under certain circumstances, as described in Appendix C.=20 We refer in this Offering Circular to these subordinated Debt=20 Securities and other Debt Securities with similar subordination=20 and interest deferral provisions as “Subordinated Debt=20 Securities.”

Subordinated Debt Securities will be unsecured subordinated=20 obligations issued under Section 304(e) of the Charter Act.=20 Subordinated Debt Securities will be unsecured and subordinated=20 and will rank junior in priority of payment to our “Senior=20 Liabilities”. “Senior Liabilities” means all=20 existing and future liabilities of Fannie Mae, other than=20 liabilities that by their terms expressly rank equal with or=20 junior to Subordinated Debt Securities. Senior Liabilities=20 include, but are not limited to, debt obligations issued under Section 304(b) of the Charter Act, liabilities in respect of our guarantees on mortgage-backed securities and Fannie Mae’s Outstanding Capital Debentures.

In the event and during the continuation of any default in the=20 payment of any amount due in respect of Senior Liabilities,=20 beyond any applicable period of grace, then, unless and until=20 such default shall have been cured or waived or shall have=20 ceased to exist, we can pay no principal of or interest on=20 Subordinated Debt Securities. All statements herein relating to=20 the payment of principal of and interest on Subordinated Debt=20 Securities are qualified in their entirety by reference to such=20 subordination.

See Appendix C for more specific information about the=20 Subordinated Debt Securities.

We may not redeem Debt Securities prior to maturity, unless we=20 specify otherwise in the applicable Pricing Supplement. We will=20 not redeem Benchmark Bills or Short-Term Notes prior to maturity.

The most common form of redemption is redemption at our option.=20 If we specify redemption at our option in the applicable Pricing=20 Supplement, we may redeem all the Debt Securities or a portion=20 of the Debt Securities from time to time. We may have the option=20 to redeem the Debt Securities on one or more specified dates, at=20 any time on or after a specified date, or during one or more=20 specified periods of time. The applicable Pricing Supplement=20 will contain the redemption price, or describe the method of=20 determining the redemption price. Holders will receive accrued=20 and unpaid interest on the principal amount redeemed to the date=20 fixed for redemption.

If we elect to redeem an issue of Debt Securities, we will give=20 notice to Holders of the Debt Securities not less than=20 10 days prior to the date of redemption in the manner=20 described under “Description of the Debt Securities— Notices.”

We may specify in the applicable Pricing Supplement that an=20 issue of Debt Securities will be subject to mandatory redemption=20 by us, in whole or in part, from time to time upon terms and at=20 prices described in the Pricing Supplement. We will give no=20 notice to Holders of mandatory redemption.

If we redeem a portion of an issue of Fed Book-Entry Securities,=20 we will redeem a pro rata portion of the then outstanding=20 principal amount of each Fed Book-Entry Security of the issue.=20 If we redeem a portion of an issue of Global Book-Entry=20 Securities, the Global Agent will reduce the principal amount of=20 one or more Global Book-Entry Securities by an aggregate amount=20 equal to the amount of the redemption, ensuring that the=20 principal amount of each Global Book-Entry Security of the issue=20 remains in an authorized denomination. The actual impact of our=20 redeeming a portion of an issue of Global Book-Entry Securities=20 on the beneficial owners will depend on the procedures of the=20 applicable clearing system. If the beneficial owner is not a=20 participant with that clearing system, the effect also will=20 depend on the procedures of the participant through which the=20 beneficial owner owns its interest in the Global Book-Entry=20 Security.

We also may issue Debt Securities that are redeemable at the=20 option of the Holders upon terms and procedures described in the=20 applicable Pricing Supplement.

All value inputs into indexing formulas, intermediate calculations, numbers resulting from any calculation, interest=20 rates, interest factors, accrued interest factors, principal=20 amounts or components used to determine principal or interest=20 payable on an issue of Debt Securities are subject to correction=20 within 30 days from the applicable Interest Payment Date or=20 Principal Payment Date. The source of a corrected value input=20 must be the same page, screen, display, press release or other=20 source from which the previously-used value input was to be=20 obtained. A correction might result in an adjustment to an=20 amount paid to a Holder.

Example. Assume that the applicable Pricing Supplement=20 for a Variable Rate Security specifies LIBOR as the applicable=20 interest rate index for determining the rate of interest payable=20 on the Debt Security. If LIBOR for a Reset Date is obtained from=20 the Reuters ISDA Page in accordance with Appendix D,=20 the rate may be superseded only by a corrected rate for that=20 Reset Date obtained from the Reuters ISDA Page. The corrected=20 rate would be used to determine the rate of interest payable in=20 respect of the Variable Rate Security as of the applicable=20 Interest Payment Date.

We may purchase Debt Securities at any price or prices, in the=20 open market or otherwise, at any time. We may hold, sell or=20 cancel any Debt Securities that we repurchase.

The Fed Book-Entry Securities may be held of record only by=20 entities eligible to maintain book-entry accounts with a U.S.=20 Federal Reserve Bank (the “Holding Institutions”). The=20 entities whose names appear on the book-entry records of a U.S.=20 Federal Reserve Bank as the entities to whose accounts Fed=20 Book-Entry Securities have been deposited are referred to as=20 “Holders” of the Fed Book-Entry Securities. A Holder=20 is not necessarily the beneficial owner of the Fed Book-Entry=20 Security. Beneficial owners ordinarily hold Fed Book-Entry=20 Securities through one or more financial intermediaries, such as=20 banks, brokerage firms and securities clearing organizations. A=20 Holder that is not the beneficial owner, and each other=20 financial intermediary holding one or more Fed Book-Entry=20 Securities directly or indirectly on behalf of the beneficial=20 owner, will have the responsibility of establishing and=20 maintaining accounts for their respective customers.

Beneficial owners of Fed Book-Entry Securities may exercise=20 their rights with respect to Fannie Mae and the U.S. Federal=20 Reserve Banks only through the Holders of the Fed Book-Entry=20 Securities. Fannie Mae and the U.S. Federal Reserve Banks will=20 have no obligation to a beneficial owner of a Fed Book-Entry=20 Security (unless the beneficial owner is also the Holder). The=20 U.S. Federal Reserve Banks will act only upon the instructions=20 of Holders in recording transfers of interests in Fed Book-Entry=20 Securities and will effect transfers of interests in Fed=20 Book-Entry Securities only to Holding Institutions. Fannie Mae=20 and the U.S. Federal Reserve Banks may treat the Holders as the=20 absolute owners of Fed Book-Entry Securities for the purpose of=20 making payments on the Fed Book-Entry Securities and for all=20 other purposes, whether or not the Fed Book-Entry Securities are=20 overdue and notwithstanding any notice to the contrary.

The person in whose name a Global Security is registered in the=20 “Register” maintained by the Global Agent as registrar=20 (in this capacity, the “Registrar”) will be the=20 “Holder” of the Global Security. We will register=20 Global Book-Entry Securities to be held by DTC in the name of=20 Cede & Co. and Global Book-Entry Securities to be held by=20 the Common Depositary in the name of Chase Nominees Limited, or=20 other nominee of DTC or the Common Depositary, as the case may=20 be. Accordingly, Cede & Co. and Chase Nominees Limited will be the Holders of the related Global Book-Entry Securities. Beneficial interests in a Global Book-Entry Security will be represented, and transfers thereof will be effected, only through book-entry accounts of financial institutions acting on behalf of the beneficial owners of that Global Book-Entry Security, as a direct or indirect participant in the applicable clearing system for that Global Book-Entry Security.

We and the Global Agent may treat the Holders as the absolute=20 owners of Global Book-Entry Securities for the purpose of making=20 payments and for all other purposes. Owners of beneficial=20 interests in a Global Book-Entry Security are not the owners or=20 Holders of that Global Book-Entry Security and, except under=20 limited circumstances described under “Description of the=20 Debt Securities—Exchange of Global Book-Entry Securities=20 for Definitive Debt Securities,” are not entitled to have=20 Debt Securities registered in their names or to receive=20 definitive Debt Securities. Accordingly, any beneficial owner=20 must rely on the procedures of the applicable clearing system or=20 on the procedures of the participant through which the=20 beneficial owner owns its interest, to exercise any rights of a=20 Holder of the Global Security.

We understand that, if we request any action of Holders or if=20 beneficial owners desire to take any action that a Holder is=20 entitled to take, DTC, Euroclear or Clearstream, or their=20 respective nominees, as the Holder of the related Global=20 Book-Entry Security, would authorize the participants through=20 which the relevant beneficial interests are held to take the=20 action. The participants in turn would authorize beneficial=20 owners owning through the participants to take the relevant=20 action, in each case in accordance with the rules and procedures=20 of the applicable system.

DTC, Euroclear and Clearstream can act only on behalf of their=20 respective participants, who in turn act on behalf of indirect=20 participants. Therefore, the ability of a beneficial owner to=20 pledge its interest in the Global Book-Entry Securities to=20 persons or entities that do not participate in the applicable=20 system, or otherwise take actions in respect of that interest,=20 may be limited by the lack of a definitive certificate. If the=20 laws of a jurisdiction require that certain purchasers of=20 securities take physical delivery of their securities in=20 definitive form, this also may impair your ability to transfer=20 beneficial interests in a Global Book-Entry Security.

We will make payments of principal and interest on Fed=20 Book-Entry Securities in U.S. dollars on the applicable payment=20 dates to Holders as of the end of the Business Day preceding the=20 payment dates. See also “Description of Debt=20 Securities—Business Day Convention.” Payments on Fed=20 Book-Entry Securities will be made by credit of the payment=20 amount to the Holders’ accounts at the U.S. Federal Reserve=20 Banks. All payments to or upon the order of a Holder will be=20 valid and effective to discharge the liability of Fannie Mae and=20 the Fiscal Agent. The Holders and each other financial=20 intermediary holding Fed Book-Entry Securities directly or=20 indirectly on behalf of beneficial owners will have the=20 responsibility of remitting payments for the accounts of their=20 customers. All payments on the Fed Book-Entry Securities are=20 subject to any applicable law or regulation.

We will make payments on the Global Book-Entry Securities to=20 DTC, Euroclear, Clearstream, and any other applicable clearing=20 system (or their nominees) as the Holders thereof. We will make=20 payments in the Specified Payment Currency (except as described=20 under “Description of the Debt Securities—Specified=20 Currencies and Specified Payment Currencies” or as=20 otherwise described in Appendix F). For certain currency=20 conversion facilities with respect to Global Securities held by=20 DTC see “Description of the Debt Securities—Currency=20 Conversions—Payment on Debt Securities”. All payments=20 to or upon the order of the Holder of a Global Book-Entry=20 Security will be valid and effective to discharge our liability=20 in respect of that Global Book-Entry Security. Normal=20 conventions observed by the system will determine ownership=20 positions within each system. Neither we nor the Global Agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Book-Entry Security or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests.

DTC has advised us that, when DTC receives any payment of=20 principal of or interest on a Global Book-Entry Security held by=20 it, it will credit its participants’ accounts with payments=20 proportionate to their respective beneficial interests in the=20 principal amount of that Global Book-Entry Security. Payments by=20 participants to owners of beneficial interests in that Global=20 Book-Entry Security held through those participants are the=20 responsibility of the participants, as is now the case with=20 securities held for the accounts of customers registered in=20 “street name.” Euroclear and Clearstream also have=20 advised us that payments on Global Book-Entry Securities held=20 through them will be credited to Euroclear participants or=20 Clearstream participants in accordance with the applicable=20 system’s rules and procedures.

We will pay interest on Global Book-Entry Securities on the=20 applicable Interest Payment Date. We will make interest payments=20 to the Holder of each Global Book-Entry Security at the close of=20 business on the fifteenth day (whether or not a Business Day)=20 (each, a “Record Date”) preceding the Interest Payment=20 Date. (Owners of beneficial interests in a Global Book-Entry=20 Security should be aware that the applicable clearing system may=20 apply a different record date for the payment of interest to its=20 participants on an Interest Payment Date.) We will make the=20 first payment of interest on any Global Book-Entry Security=20 originally issued between a Record Date and the related Interest=20 Payment Date on the Interest Payment Date following the next=20 Record Date to the Holder on the next Record Date. We will owe=20 the principal of each Global Book-Entry Security, together with=20 accrued and unpaid interest thereon, on the Principal Payment=20 Date for the Global Book-Entry Security (subject to the=20 Holder’s right on the related Record Date to receive=20 interest due on an Interest Payment Date that is on or prior to=20 the Principal Payment Date) and will pay the Holder when the=20 Holder presents and surrenders the Global Book-Entry Security.=20 See also “Description of the Debt Securities—Business=20 Day Convention.”

All payments on Global Book-Entry Securities are subject to any=20 applicable law or regulation. If a payment outside the United=20 States is illegal or effectively precluded by exchange controls=20 or other similar restrictions, we will make payments on the=20 related Global Book-Entry Securities at the office of any paying=20 agent in the United States.

All money paid by us to the Global Agent or to any paying agent=20 for principal and interest payments on any Global Book-Entry=20 Security that remains unclaimed or undistributed at the end of=20 one year after the principal or interest is due and payable will=20 be repaid to us, and the Holder of the Global Book-Entry=20 Security thereafter may look only to us for payment.

Additional provisions related to payments on non-U.S. dollar=20 denominated Debt Securities appear under “Description of=20 the Debt Securities—Currency Conversions”.

We may modify, amend or supplement the Statement of Terms which=20 would modify, amend or supplement the terms of Fed Book-Entry=20 Securities without the consent of Holders of any Fed Book-Entry=20 Securities, in any manner that we determine will not adversely=20 affect in any material way the interests of the Holders of Fed=20 Book-Entry Securities, including:


	•	to cure, correct or supplement any ambiguous or defective=20 provision in the Statement of Terms or to make any other=20 provision with respect to the issue of Fed Book-Entry Securities=20 that is not inconsistent with the provisions of the Statement of=20 Terms,

	•	to conform the Statement of Terms to, or to cure any ambiguity=20 or discrepancy due to changes in, the HUD Book-Entry Regulations=20 or the Fiscal Agency Agreement or any regulation or document that the HUD Book-Entry Regulations or the Fiscal Agency Agreement make applicable to our book-entry=20 securities, or

	•	to increase the amount of the issue of Fed Book-Entry Securities.

In addition, with either the written consent, or the affirmative=20 vote at a meeting, of the Holders of at least a majority of the=20 aggregate then outstanding principal amount of an issue of Fed=20 Book-Entry Securities, we may modify, amend or supplement the=20 Statement of Terms of such issue to add any provisions or change=20 in any manner or eliminate any provisions of those Fed=20 Book-Entry Securities or modify in any manner the rights of the=20 Holders. However, without the written consent or affirmative=20 vote of the Holder of the principal amount of that Fed=20 Book-Entry Security, no modification, amendment or supplement=20 may:


	•	change the Maturity Date of, or the due date of any installment=20 of interest on, the Fed Book-Entry Security,

	•	materially modify any redemption provisions relating to the=20 redemption price of, or any redemption date or period for, the=20 Fed Book-Entry Security,

	•	reduce the principal amount of, or materially modify the rate of=20 interest or the calculation of the rate of interest on, the Fed=20 Book-Entry Security, or

	•	reduce the percentage of the then outstanding principal amount=20 of the Fed Book-Entry Securities of which the Fed Book-Entry=20 Security forms a part, the consent or affirmative vote of the=20 Holders of which is necessary to modify, amend or supplement the=20 related Statement of Terms.

Holders entitled to vote a majority of the then outstanding=20 aggregate principal amount of an issue of Fed Book-Entry=20 Securities will constitute a quorum at any meeting of Holders.=20 Fed Book-Entry Securities that we own may not be counted toward=20 establishing a quorum, or consenting to or voting for any matter=20 presented to Holders.

Any instrument given by or on behalf of any Holder of a Fed=20 Book-Entry Security in connection with any consent to a=20 modification, amendment or supplement will be irrevocable once=20 given and will be conclusive and binding on all subsequent=20 Holders of that Fed Book-Entry Security. Except as set forth=20 above, any modification, amendment or supplement of the terms of=20 Fed Book-Entry Securities will be conclusive and binding on all=20 Holders of Fed Book-Entry Securities, whether or not they have=20 given consent or were present at any meeting.

We and the Global Agent may modify, amend or supplement the=20 Global Agency Agreement and the terms of one or more issues of=20 Global Book-Entry Securities without the consent of Holders of=20 any Global Book-Entry Securities, in any manner that we and the=20 Global Agent determine will not adversely affect in any material=20 way the interests of the Holders, including:


	•	to cure, correct or supplement any ambiguous or defective=20 provision in the Global Agency Agreement or to make any other=20 provision with respect to the issue of Global Book-Entry=20 Securities consistent with the provisions of the Global=20 Book-Entry Securities,

	•	to increase the amount of the issue of Global Book-Entry=20 Securities, or

	•	to redenominate the currency unit from the Original Specified=20 Payment Currency to the Euro and to take all of the actions=20 described in and contemplated by Appendix F,=20 “Redenomination to the Euro.”

In addition, with the written consent, or the affirmative vote=20 at a meeting, of the Holders of at least a majority of the=20 aggregate then outstanding principal amount of Global Book-Entry=20 Securities or an issue of Global Book-Entry Securities, we may=20 modify, amend or supplement the Global Agency Agreement or the=20 terms of an issue of Global Book-Entry Securities, respectively,=20 to add any provisions or change in any manner or eliminate any=20 provisions of Global Book-Entry Securities or modify in any manner the rights of the Holders. However, without the written consent or affirmative vote of the Holder of a Global Book-Entry Security, no modification, amendment or supplement may:


	•	change the Maturity Date of, or the due date of any installment=20 of interest on, the Global Book-Entry Security,

	•	materially modify any redemption provisions relating to the=20 redemption price of, or any redemption date or period for, the=20 Global Book-Entry Security,

	•	reduce the principal amount of, or materially modify the rate of=20 interest or the calculation of the rate of interest on, the=20 Global Book-Entry Security,

	•	change the Specified Payment Currency of the Global Book-Entry=20 Security (except as described in Appendix F), or

	•	reduce the percentage of the then outstanding principal amount=20 of the Global Book-Entry Securities of which the Global=20 Book-Entry Security forms a part, the consent or affirmative=20 vote of the Holders of which is necessary to modify, amend or=20 supplement the Global Agency Agreement or the terms of the=20 related Global Book-Entry Securities.

Holders entitled to vote a majority of the aggregate principal=20 amount of the Global Book-Entry Securities or applicable issue=20 of Global Book-Entry Securities at the time outstanding will=20 constitute a quorum at any meeting of Holders, except that at=20 any reconvened meeting adjourned for lack of a quorum, 25% in=20 aggregate principal amount of the Global Book-Entry Securities=20 or applicable issue of Global Book-Entry Securities entitled to=20 vote shall constitute a quorum. Global Book-Entry Securities=20 that we own may not be counted toward establishing a quorum, or=20 consenting to or voting for any matter presented to any Holder.

Special rules for determining the “principal amount”=20 of Global Book-Entry Securities in specific circumstances are=20 described below.

The “principal amount,” for purposes of this section,=20 for a Global Book-Entry Security that is a Zero-Coupon Security=20 or was issued at an “issue price” of 80% or less of=20 its principal amount will be calculated as provided in the=20 Global Agency Agreement by adding the “issue price” of=20 the Global Book-Entry Security, plus the “original issue=20 discount” that has accrued since the issue date of the=20 Global Book-Entry Security, minus any part of the “stated=20 redemption price at maturity” of the Global Book-Entry=20 Security that has been paid since the issue date of the Global=20 Book-Entry Security. See “United States Taxation—U.S.=20 Persons—Debt Securities Issued at a Discount” for an=20 explanation of terms used in this paragraph.

The “principal amount,” for purposes of this section,=20 of a Global Book-Entry Security whose Specified Principal=20 Currency is other than U.S. dollars will be the U.S. dollar=20 equivalent, determined on the issue date, of the principal=20 amount of the Global Book-Entry Security.

The “principal amount” of a Global Book-Entry Security=20 with principal determined by reference to an index, exchange=20 rate or formula will be described in the applicable Pricing=20 Supplement.

As provided in the Global Agency Agreement, we may establish a=20 record date for the determination of Holders entitled to vote at=20 any meeting of Holders of Global Book-Entry Securities, to grant=20 any consent in respect of Global Book-Entry Securities and to=20 receive notice with respect to any meeting or consent of Holders.

Any instrument given by or on behalf of any Holder of a Global=20 Book-Entry Security in connection with any consent to a=20 modification, amendment or supplement will be irrevocable once=20 given and will be conclusive and binding on all subsequent=20 Holders of the Global Book-Entry Security. Except as set forth=20 above, any modification, amendment or supplement of the terms of=20 Global Book-Entry Securities will be conclusive and binding on=20 all Holders of Global Book-Entry Securities, whether or not they=20 have given consent or were present at any meeting.

We will give notices to Holders of Fed Book-Entry Securities by=20 broadcast through the communication system of the U.S. Federal=20 Reserve Banks. Notice by broadcast will be considered given on=20 the date of broadcast or, if broadcasted more than once, on the=20 date of first broadcast. Instead of notice by broadcast, we may=20 give notices to Holders in any reasonable manner that we=20 determine. Notice by another manner will be considered given on=20 the date of dissemination or, if disseminated more than once, on=20 the date of first dissemination.

We, or the Global Agent, will give notices to Holders of Global=20 Book-Entry Securities by mail to the addresses of the Holders as=20 they appear in the Register. Notices by mail will be considered=20 given on the date of mailing.

If an issue of Debt Securities is listed on the Luxembourg Stock=20 Exchange and its rules so require, we also will give notices=20 with respect to that issue of Debt Securities in a general=20 circulation newspaper in Luxembourg (which is expected to be the=20 Luxemburger Wort) or, if publication in Luxembourg is not=20 practical, elsewhere in Europe. Notice by publication will be=20 considered given on the date of publication or, if published=20 more than once, on the date of first publication.

Failure to give notice or a defect in a notice to one Holder=20 will not affect the validity of notice to other Holders.

Exchange of Global Book-Entry Securities for = Definitive Debt=20 Securities

If we issue definitive Debt Securities in exchange for Global=20 Book-Entry Securities as described below, the definitive Debt=20 Securities will have the same terms as the Global Book-Entry=20 Securities for which they were exchanged, except as described=20 below.

Issuance of Definitive Debt Securities. A Holder can exchange beneficial interests in a Global Book-Entry Security for definitive Debt Securities only under the following circumstances:


	(1) the exchange is permitted by applicable = law; and

	(2) •	in the case of a Global Book-Entry Security held through DTC, DTC notifies us that it is no longer willing or able to act as a depository or ceases to be a “clearing agency” registered under the Securities Exchange Act of 1934, as amended, and we cannot find a successor within 90 days after we receive notice;

	•	in the case of Global Book-Entry Securities held through another=20 depository, if all of the clearing systems for those Global=20 Book-Entry Securities are closed for business for 14 consecutive=20 days, or are permanently closed and we cannot find a successor=20 within 90 days;

	•	a Holder has initiated a judicial proceeding to enforce the=20 Holder’s rights under the Global Security in court, and=20 counsel has advised the Holder that it is necessary to have a=20 definitive Debt Security; or

	•	except in the case of 183 Day Notes (as defined in=20 Appendix B), we, either at a Holder’s request and=20 expense or otherwise, in our own discretion, decide to issue=20 definitive securities.

In any of the above circumstances, we will execute and deliver=20 definitive Debt Securities to the Global Agent for their=20 delivery to the Holders as soon as practicable.

Title. The person in whose name a definitive Debt=20 Security is registered in the Register will be the=20 “Holder” of the definitive Debt Security. We and the=20 Global Agent may treat the Holders as the absolute owners of=20 definitive Debt Securities for the purpose of making payments=20 and for all other purposes whether or not any payments on the=20 definitive Debt Securities are overdue.

Payments. We will pay interest on a definitive Debt=20 Security on each applicable Interest Payment Date. We will pay=20 by check mailed to the Holder at the close of business on the=20 Record Date preceding the Interest Payment Date at the Holder’s address appearing in the Register. We will pay the principal of each definitive Debt Security, together with accrued and unpaid interest, on the Principal Payment Date against presentation and surrender of the definitive Debt Security by check at the appropriate office of the Global Agent or other paying agent or mailed by the Global Agent to the Holder of the definitive Debt Security. We will use a United States bank for checks in U.S. dollars and a bank office located outside the United States for checks in other Specified Payment Currencies. If an issue of Debt Securities of which definitive Debt Securities form a part is listed on the Luxembourg Stock Exchange and the rules of that exchange so require, we will appoint and maintain a paying agent in Luxembourg with respect to that issue of Debt Securities. See “Description of the Debt Securities—Notices” for a description of how we will notify the Holders of definitive Debt Securities of the appointment and location of the paying agent.

The Holder of an aggregate principal amount of at least=20 $10,000,000 (or the equivalent in the Specified Currency) of an=20 issue of Debt Securities of which definitive Debt Securities=20 form a part may elect to receive payments by wire transfer of=20 immediately available funds in the Specified Payment Currency to=20 an account with a bank designated by the Holder that is=20 acceptable to us. In order for the Holder to receive the=20 payments, the Global Agent or other paying agent, if applicable,=20 must receive the following by mail, hand or telex at its=20 principal U.S. corporate trust office or its specified office,=20 respectively:


	•	for interest payments, a written request by the close of=20 business on the related Record Date

	•	for payments on the Principal Payment Date, a written request by=20 the close of business 15 days prior to the Principal=20 Payment Date and the definitive Debt Security two Business Days=20 prior to the Principal Payment Date

All payments on definitive Debt Securities are subject to any=20 applicable law or regulation. If a payment outside the United=20 States is illegal or effectively precluded by exchange controls=20 or similar restrictions, payments in respect of the related=20 definitive Debt Securities may be made at the office of any=20 paying agent in the United States.

Partial Redemption. If we redeem a portion of an issue of=20 definitive Debt Securities, the Global Agent will select by lot,=20 or in any other manner that the Global Agent deems fair and=20 appropriate, those definitive Debt Securities to be redeemed,=20 ensuring that the principal amount of each outstanding=20 definitive Debt Security after the redemption is in an=20 authorized denomination.

Transfer and Exchange. Holders may present definitive=20 Debt Securities for transfer or exchange at the office of the=20 Registrar or any other transfer agent, with transfer=20 documentation completed and payment of any taxes and other=20 governmental charges. If an issue of Debt Securities of which=20 definitive Debt Securities form a part is listed on the Luxembourg Stock Exchange and the rules of that exchange so=20 require, we will appoint and maintain a transfer agent in=20 Luxembourg for that issue of Debt Securities.

Holders may transfer or exchange definitive Debt Securities in=20 whole or in part only in the authorized denominations of the=20 Global Book-Entry Securities for which they were exchanged. See=20 “Description of the Debt Securities— Denomination.” In the case of a transfer of a definitive=20 Debt Security in part, the Registrar will issue a new definitive=20 Debt Security for the balance not transferred.

Purchasers of Debt Securities must pay for the Debt Securities=20 in the applicable Specified Currency. Dealers to whom or through=20 whom Debt Securities are sold may arrange for the conversion of=20 the investor’s currency into the Specified Currency to enable purchasers to pay for the Debt Securities if purchasers=20 so request no later than the day determined by that Dealer. We=20 will not be involved in any manner in, and will have no=20 responsibility for, that conversion. Each Dealer will make the conversion on terms and subject to any conditions, limitations and charges that the Dealer may establish. The purchasers of the Debt Securities will bear all costs of conversion.

Except as described above, we must make payments of principal of=20 and any interest on all Debt Securities in the Specified Payment=20 Currency. At the present time, there are limited facilities in=20 the United States for the conversion of foreign currencies or=20 currency units into U.S. dollars, and commercial banks generally=20 do not offer non-U.S. dollar checking or savings account=20 facilities. Accordingly, in the case of Global Book-Entry=20 Securities whose Specified Payment Currency is other than U.S.=20 dollars, the currency exchange bank specified in the applicable=20 Pricing Supplement (the “Currency Exchange Bank”), for=20 the Holders of the Global Book-Entry Securities, will convert=20 any amounts paid by us in the Specified Payment Currency into=20 U.S. dollars, unless the Holders elect to receive payments in=20 the Specified Payment Currency as hereinafter described. We will=20 not be involved in any manner in, and will have no=20 responsibility for, the conversion of the Specified Payment=20 Currency for the Global Book-Entry Securities into U.S. dollars.

The U.S. dollar amount to be received by a Holder of a Global=20 Book-Entry Security in respect of which payments are to be=20 converted from the Specified Payment Currency into U.S. dollars=20 will be determined by the Currency Exchange Bank in the morning=20 of the day that would be considered the date for=20 “spot” settlement of the Specified Payment Currency on=20 the applicable payment date in accordance with market convention (generally two New York business days prior to the payment date)=20 at the market rate determined by the Currency Exchange Bank to=20 accomplish the conversion on the payment date of the aggregate=20 amount of the Specified Payment Currency payable in respect of=20 Global Book-Entry Securities scheduled to receive payments=20 converted into U.S. dollars. All currency exchange costs will be=20 borne by the Holders of the Global Book-Entry Securities (and,=20 accordingly, by the related beneficial owners) by deductions=20 from the payments. Holders of Global Book-Entry Securities are=20 subject to the risk of market disruption and the risk that all=20 or any portion of the Specified Payment Currency will not be=20 convertible into U.S. dollars. In those cases, Holders of the=20 Global Book-Entry Securities will receive payment in the=20 Specified Payment Currency.

The Holder of a Global Book-Entry Security held through DTC to=20 be paid in a Specified Payment Currency other than U.S. dollars=20 will have the option to receive payments of the principal of and=20 any interest on the Global Book-Entry Security in the Specified=20 Payment Currency by notifying DTC no later than the third New=20 York business day after the related Record Date, in the case of=20 payments on an Interest Payment Date, or the date 12 days=20 prior to the Principal Payment Date, in the case of payments on=20 the Principal Payment Date. We understand that Euroclear and=20 Clearstream, unless specifically requested not to do so by a=20 participant prior to the 15th day preceding the applicable=20 Interest Payment Date or Principal Payment Date, will elect to=20 receive all payments of principal and interest in respect of=20 Global Book-Entry Securities held through them in the applicable=20 Specified Payment Currency if it is other than U.S. dollars.

The Fed Book-Entry Securities (including our rights and=20 obligations with respect to the Fed Book-Entry Securities) will=20 be governed by, and construed in accordance with,=20 (1) regulations adopted by the U.S. Department of Housing=20 and Urban Development or any other U.S. governmental body or=20 agency, as from time to time in effect, that apply to our Fed=20 Book-Entry Securities, currently the HUD Book-Entry Regulations,=20 and (2) to the extent the regulations identified in clause (1) do not apply, the laws of the State of New York, U.S.A.

The Global Book-Entry Securities will be governed by, and=20 construed in accordance with, the laws of the State of New York,=20 U.S.A.

Courts in the United States customarily have not rendered=20 judgments for money damages denominated in any currency other=20 than U.S. dollars. New York law currently provides, however,=20 that a judgment or decree based upon an obligation denominated=20 in a currency other than U.S. dollars will be rendered in the=20 foreign currency of the underlying obligation and converted into=20 U.S. dollars at a rate of exchange prevailing on the date of the=20 entry of the judgment or decree. As a result, the Holder of a=20 Global Book-Entry Security would be subject to exchange rate=20 fluctuations between the date of entry of the judgment or decree=20 and the time the foreign currency judgment or decree is paid to=20 the Holder in U.S. dollars (whether or not the Holder then=20 converts any amounts paid into the Specified Payment Currency).

Benchmark Bills and Short-Term Notes that are = Fed=20 Book-Entry Securities

As described in Appendix B, Benchmark Bills and Short-Term=20 Notes that are Fed Book-Entry Securities will be issued under a=20 fiscal agency agreement between Fannie Mae and FRBNY dated as of=20 January 2, 1969, as amended or supplemented. The provisions=20 of that agreement are substantially similar to the terms of the=20 Fiscal Agency Agreement described below.

The U.S. Federal Reserve Banks will be the fiscal agents for Fed Book-Entry Securities that are not Benchmark Bills or Short-Term=20 Notes. The U.S. Federal Reserve Banks currently act as Fiscal=20 Agent under the Fiscal Agency Agreement with Fannie Mae, dated=20 as of April 23, 1974, as amended or supplemented. Fannie=20 Mae and the U.S. Federal Reserve Banks may amend, modify or=20 supplement in any respect, or may terminate, substitute or=20 replace, the Fiscal Agency Agreement without the consent of any=20 Holder of Fed Book-Entry Securities. Where we refer in this=20 Offering Circular to the “Fiscal Agency Agreement,” we=20 mean the agreement in effect from time to time under which the=20 U.S. Federal Reserve Banks act as the Fiscal Agent for the Fed=20 Book-Entry Securities. We have engaged in, and in the future may=20 engage in, other business relationships with them.

In acting under the Fiscal Agency Agreement, the Fiscal Agent=20 acts solely as our fiscal agent and does not assume any=20 obligation or relationship of agency or trust for or with any=20 Holder.

We have appointed The Chase Manhattan Bank as the global agent=20 for the Global Book-Entry Securities. The Chase Manhattan Bank=20 acts as Global Agent under an agreement with Fannie Mae, dated=20 as of December 21, 1999, as it may be amended and=20 supplemented. The Chase Manhattan Bank, which has its principal=20 U.S. corporate trust office at 450 West 33rd Street, 15th Floor,=20 New York, NY 10001-2697, is the fiscal agent under some of our=20 debt securities and has other business relationships with us.

In acting under the Global Agency Agreement, the Global Agent=20 acts solely as our fiscal agent and does not assume any=20 obligation or relationship of agency or trust for or with any=20 Holder of a Global Book-Entry Security, except that any moneys=20 held by the Global Agent for payment on a Global Book-Entry=20 Security will be held in trust for the Holder (as provided in=20 the Global Agency Agreement).

We have appointed initially the Global Agent as Registrar,=20 Transfer Agent and Paying Agent for the Global Book-Entry=20 Securities. We may vary or terminate the appointment of the Global Agent as the Registrar, Transfer Agent or Paying Agent or=20 appoint additional or other transfer agents or paying agents or approve any change in the office through which the Registrar or any transfer agent or paying agent acts.

If any of the Debt Securities are listed on the Luxembourg Stock=20 Exchange, and the rules of such exchange so require, notice of=20 any such change in appointments shall be published for the=20 information of the Holders of Debt Securities.

Debt Securities may be held through organizations participating=20 in one or more international and domestic clearing systems,=20 principally the systems operated by the U.S. Federal Reserve=20 Banks and DTC, in the United States, and Euroclear and=20 Clearstream, in Europe. Electronic securities and payment=20 transfer, processing, depositary and custodial arrangements=20 among these systems and others, either directly or indirectly=20 through custodians and depositaries, may enable Debt Securities=20 to be issued, held and transferred among the systems as=20 described below. Special procedures among these systems allow=20 clearance and settlement of certain Debt Securities traded=20 across borders in the secondary market. Cross-market transfers=20 of Debt Securities denominated in some Specified Currencies may=20 be cleared and settled using these procedures. However, there=20 can be no assurance that cross-market transfers of any Debt=20 Securities will be possible at any particular point in the=20 future.

Each relevant system has its own separate operating procedures=20 and arrangements with participants or accountholders that govern=20 the relationship between them and the system and in respect of which we are not and will not be a party. The clearing systems=20 may impose fees for the maintenance and operation of the=20 accounts in which beneficial interests in the Debt Securities=20 are maintained.


	(1) most Debt Securities denominated and payable in U.S.=20 dollars will clear and settle through the Fed Book-Entry System,=20 and indirectly through other clearing systems, such as Euroclear=20 or Clearstream,

	(2) Debt Securities denominated or payable in a Specified=20 Currency other than U.S. dollars (and Debt Securities=20 denominated and payable in U.S. dollars that are not cleared and=20 settled in accordance with clause (1) above) will clear and=20 settle through the system operated by DTC, and indirectly=20 through other clearing systems, such as Euroclear or=20 Clearstream, and

	(3) Debt Securities, irrespective of the Specified=20 Currency in which they are denominated or payable, distributed=20 solely outside of the United States will clear and settle=20 through the systems operated by Euroclear, Clearstream or other=20 clearing system indicated in the applicable Pricing Supplement=20 and, in certain cases, DTC.

Fed Book-Entry System. The U.S. Federal Reserve Banks=20 operate a book-entry system, which provides book-entry holding=20 and settlement for U.S. dollar denominated securities issued by=20 the U.S. Government, some of its agencies and instrumentalities=20 and international organizations of which the United States is a=20 member. The system enables Holding Institutions to hold, make=20 payments and transfer securities and funds through the U.S.=20 Federal Reserve Banks’ Fedwire system.

DTC. DTC is a limited-purpose trust company organized=20 under the laws of the State of New York, and is a member of the=20 U.S. Federal Reserve System, a “clearing corporation”=20 within the meaning of the New York Uniform Commercial Code and a=20 “clearing agency” registered pursuant to the=20 provisions of Section 17A of the Securities Exchange Act of=20 1934, as amended. DTC holds securities for DTC participants and=20 facilitates the clearance and settlement of transactions between=20 DTC participants through electronic book-entry changes in=20 accounts of DTC participants.

Euroclear and Clearstream. Euroclear was created in 1968=20 to hold securities for its participants and to clear and settle=20 transactions between its participants through simultaneous electronic book-entry delivery against payment. Euroclear is=20 operated by Euroclear Bank, and all Euroclear securities=20 clearance and cash accounts are with Morgan Guaranty. They are=20 governed by the Terms and Conditions governing use of Euroclear=20 and the related Operating Procedures of the Euroclear System, and applicable Belgian law. Clearstream is incorporated under=20 the laws of Luxembourg as a limited company. A=20 participant’s overall contractual relations with=20 Clearstream are governed by the general Terms and Conditions,=20 related operating rules and procedures and applicable Luxembourg=20 law.

Clearstream and Euroclear each hold securities for their=20 customers and facilitate the clearance and settlement of=20 securities transactions by electronic book-entry transfer=20 between their respective account holders. Euroclear and=20 Clearstream have established an electronic bridge between their=20 two systems across which their respective participants may=20 settle trades with each other.

Other. We will describe in the applicable Pricing=20 Supplement or other supplement any other clearing system that is available for a particular issue of Debt Securities.

On initial issue, Debt Securities will be credited through one=20 or more of the systems described above or any other system=20 specified in the applicable Pricing Supplement. Payment from the=20 applicable Dealer for Fed Book-Entry Securities will be on a=20 delivery versus payment basis and for Global Book-Entry=20 Securities will be on a delivery versus payment or free delivery=20 basis, as agreed to by us. Clearance and settlement procedures=20 may vary according to the Specified Currency in which the Debt=20 Securities are denominated or payable. The customary clearance=20 and settlement procedures of certain systems are described below.

U.S. Federal Reserve Banks. Fed Book-Entry Securities=20 will be issued and settled through the Fed Book-Entry System in=20 same-day funds and will be held by designated Holding Institutions. After initial issue, all Fed Book-Entry Securities=20 will continue to be held by those Holding Institutions in the=20 Fed Book-Entry System unless arrangements are made for the=20 transfer thereof to another Holding Institution.

DTC. DTC participants acting on behalf of investors=20 holding Global Book-Entry Securities through DTC will follow the=20 delivery practices applicable to securities eligible for=20 DTC’s Same-Day Funds Settlement System. Global Book-Entry=20 Securities held through DTC will be credited to DTC=20 participants’ securities accounts following confirmation of=20 receipt of payment to us on the relevant issue date.

Euroclear and Clearstream. Investors holding Global=20 Book-Entry Securities through Euroclear and Clearstream will=20 follow the settlement procedures applicable to conventional=20 eurobonds. These Global Book-Entry Securities will be credited=20 to Euroclear and Clearstream participants’ securities=20 clearance accounts either on the relevant issue date or on the=20 settlement day following the relevant issue date against payment=20 in same-day funds, for value on the relevant issue date.

Fed Book-Entry Securities. Transfers of Fed Book-Entry=20 Securities can take place only in book-entry form on the Fed=20 Book-Entry System. These transfers will occur between Holding=20 Institutions in accordance with the rules of the Fed Book-Entry=20 System.

Global Book-Entry Securities. Transfers of beneficial=20 interests in Global Book-Entry Securities within the various=20 systems that may be clearing and settling interests therein will=20 be made in accordance with the usual rules and operating=20 procedures of the relevant system applicable to the Specified=20 Currency in which the Global Book-Entry Securities are=20 denominated or payable and the nature of the transfer.

General. For issues of Debt Securities that are cleared=20 and settled through more than one system, time zone differences=20 may result in the securities account of an investor in one=20 system being credited during the settlement processing day=20 immediately following the settlement date of the other system=20 and the cash account being credited for value on the settlement=20 date but only being available as of the day following the=20 settlement date.

Although the U.S. Federal Reserve Banks, DTC, Euroclear,=20 Clearstream and other clearing systems have procedures to=20 facilitate transfers of beneficial interests in Debt Securities=20 among their respective Holding Institutions, participants and=20 accountholders, they are under no obligation to perform or=20 continue to perform those procedures, and those procedures may=20 be modified or discontinued at any time. None of us, the Fiscal=20 Agent, the Global Agent or any other agent will have any=20 responsibility for the performance by any system (other than the=20 Fiscal Agent with respect to the Fed Book-Entry System) or their=20 respective direct or indirect participants or accountholders of=20 their respective obligations under the rules and procedures=20 governing their operations.

The Debt Securities and payments thereon generally are subject=20 to taxation. Therefore, you should consider the tax consequences=20 of owning a Debt Security, Interest Component or Principal=20 Component before acquiring one.

We have engaged Arnold & Porter as special tax counsel to=20 review the following discussion. They have given us their=20 opinion that the discussion correctly describes the principal=20 U.S. federal income tax consequences to beneficial owners of=20 Debt Securities.

The following discussion is general and may not apply to your=20 particular circumstances for any of the following (or other) reasons:


	•	This summary is based on federal tax laws in effect as of the=20 date of this Offering Circular. Changes to any of these laws=20 after this date may affect the tax consequences described below.

	•	This summary discusses only Debt Securities acquired by=20 beneficial owners at original issuance and held as capital=20 assets (within the meaning of federal tax law). It does not=20 discuss all of the tax consequences that may be relevant to=20 beneficial owners subject to special rules, such as banks,=20 thrift institutions, real estate investment trusts, regulated=20 investment companies, tax-exempt organizations, brokers and=20 dealers in securities or currencies, certain securities traders=20 and certain other financial institutions. This discussion also=20 does not discuss tax consequences that may be relevant to a=20 beneficial owner in light of the beneficial owner’s=20 particular circumstances, such as a beneficial owner holding a=20 Debt Security as a position in a straddle, hedging, conversion=20 or other integrated investment.

	•	The tax consequences of owning any Debt Securities with special=20 characteristics may be set forth in a Pricing Supplement.

	•	The Debt Securities also are subject to taxes imposed by states=20 and possessions of the United States and by local taxing=20 authorities. If you reside in a state of the United States that=20 imposes intangible property or income taxes, you should consult=20 your own tax advisors as to the consequences of such laws.

Because the following discussion may not apply to you, we=20 advise you to consult your own tax advisors regarding the tax=20 consequences of purchasing, owning and disposing of Debt=20 Securities (or Interest Components or Principal Components),=20 including the advisability of making any of the elections=20 described below.

We sell many different types of Debt Securities. The federal=20 income tax rules that will apply to a Debt Security will depend=20 on the terms of that Debt Security and whether the beneficial=20 owner is a U.S. Person. For purposes of the following discussion, a “U.S. Person” means:


	•	a citizen or individual resident of the United States,

	•	a corporation or partnership created or organized in or under=20 the laws of the United States or any state thereof or the=20 District of Columbia,

	•	an estate the income of which is includible in its gross income=20 for U.S. federal income tax purposes without regard to its=20 source,

	•	a trust if a court within the United States is able to exercise=20 primary supervision over its administration and at least one=20 U.S. Person has the authority to control all substantial=20 decisions of the trust, or

	•	certain trusts in existence on August 20, 1996, and treated=20 as United States persons (within the meaning of=20 section 7701(a)(30) of the federal income tax code) prior=20 to such date, that elect to continue to be treated as United=20 States persons, as provided in Treasury Regulations.

The first part of the following discussion is addressed to=20 beneficial owners who are U.S. Persons, the second part is=20 addressed to beneficial owners who are not U.S. Persons and the=20 last part addresses rules concerning information reporting to=20 the U.S. Internal Revenue Service (the “IRS”) and=20 backup withholding.

Special rules governing Debt Securities targeted to foreign=20 markets are described in Appendix G.

If you are a U.S. Person and own a Debt Security, income from=20 that Debt Security is subject to U.S. federal income taxation,=20 and if you own the Debt Security when you die, the Debt Security=20 will be included in your estate subject to U.S. federal estate=20 tax.

Tax Status of Debt Securities for Building and = Loans,=20 Savings Banks and REITs

The IRS has ruled that Fannie Mae is an instrumentality of the=20 United States for purposes of section 7701(a)(19) of the federal=20 income tax code. Therefore, domestic building and loan=20 associations and savings banks may treat investments in our=20 securities as part of the percentage of total assets they must=20 invest in specified assets, which includes “stock or=20 obligations of a corporation which is an instrumentality of the=20 United States.” Further, the IRS permits real estate=20 investment trusts (REITs) to treat holdings of Fannie Mae=20 securities as “government securities” for purposes of=20 the requirement that 75 percent of the value of their total=20 assets consists of real estate assets, cash and cash items=20 (including receivables), and government securities.

Interest paid on a Debt Security generally is taxable as ordinary interest income. You must report this income when it=20 accrues or you receive it, depending on your method of=20 accounting for U.S. federal income tax purposes. You may have to=20 follow special reporting rules, however, if your Debt Security=20 has “original issue discount” (“OID”), as=20 described in the following paragraphs.

If you purchase a Debt Security at original issuance at a price below its principal amount, the federal income tax laws=20 generally treat the difference between the amount you paid and=20 the Debt Security’s principal amount as OID. In addition,=20 if you purchase at original issuance a Debt Security that=20 matures one year or less from its issuance date, that Debt=20 Security has OID as described below under “United States=20 Taxation—U.S. Persons—Debt Securities with a Term of=20 One Year or Less.” Rules in the federal tax laws (the=20 “OID Regulations”) define OID as the excess of the=20 “stated redemption price at maturity” (defined below)=20 of each such Debt Security over its “issue price”=20 (defined below) if such excess equals or exceeds a de minimis amount. If all of the principal to be paid on a Debt=20 Security is to be paid in a single payment, de minimis=20 OID is defined as one-quarter of one percent of such Debt=20 Security’s stated redemption price at maturity multiplied=20 by the number of complete years to its maturity. The=20 “stated redemption price at maturity” of a Debt=20 Security is the sum of all payments on the Debt Security other=20 than interest based on a fixed rate (or a variable rate, unless=20 an applicable Pricing Supplement states otherwise) and payable=20 unconditionally at least annually. The “issue price”=20 of a Debt Security is the first price at which a substantial=20 amount of that issue of Debt Securities is sold to the public=20 for cash (ignoring sales to bond houses, underwriters, placement=20 agents and other wholesalers).

If you own a Debt Security with a de minimis amount of=20 OID you must include any de minimis OID in income, as=20 capital gain, on a pro rata basis as principal payments=20 are made on the Debt Security.

If your Debt Security has more than de minimis OID, you=20 must include the OID in income as it accrues, which may be=20 before you receive cash attributable to such income. You must=20 include OID in income using the yield to maturity of the Debt=20 Security (as defined in the OID Regulations), which is computed=20 based on a constant annual rate of interest and compounding at=20 the end of each accrual period. The OID Regulations permit you=20 to use accrual periods of any length from one day to one year to=20 compute accruals of OID, provided each scheduled payment of=20 principal or interest occurs either on the first or the last day=20 of an accrual period. Under these rules, you must include in=20 income increasingly greater amounts of OID in successive accrual=20 periods, unless payments that are part of the stated redemption=20 price at maturity of a Debt Security are made before its final=20 maturity.

In the case of a Subordinated Debt Security, we may be required=20 to defer the payment of interest as described in=20 Appendix C. Thus, interest on a Subordinated Debt Security=20 would not be unconditionally payable at least annually for=20 purposes of the OID Regulations, unless the likelihood of the=20 deferral of interest payments was remote. Under the OID=20 Regulations, this determination must be made at the time of=20 issuance of each Subordinated Debt Security.

If the likelihood (as of time of the issuance of a Subordinated=20 Debt Security) of a deferral of any payment of interest was=20 determined not to be remote or if any payment of interest on a=20 Subordinated Debt Security was actually deferred, the=20 Subordinated Debt Security would be treated as issued with OID=20 at the time of issuance or at the time of such deferral, as the=20 case may be, and all stated interest would thereafter be treated=20 as OID as long as the Subordinated Debt Security remained=20 outstanding. In that event, all of a beneficial owner’s=20 taxable interest income in respect of the Subordinated Debt=20 Security would constitute OID that generally would have to be=20 included in income as described under “Debt Securities=20 Issued at a Discount” above.

The OID Regulations contain additional rules that apply to Debt=20 Securities that we may redeem (“call”) prior to their=20 final maturity date. Under these rules, we will be presumed to=20 exercise a call right if doing so would lower the yield to=20 maturity of the callable Debt Security. If this presumption=20 applies, but we do not exercise the call right, the Debt=20 Security will be deemed reissued at the call price for purposes=20 of determining subsequent accruals of interest and OID.

The rules concerning callable Debt Securities are especially=20 important for determining the OID treatment of “Step-Up=20 Debt Securities.” Step-Up Debt Securities are Debt=20 Securities that are issued at par, have an initial fixed=20 interest rate that increases to a higher fixed rate on a=20 specified date, and are redeemable at par on the date the rate=20 changes (including Debt Securities that also may be redeemable=20 prior to that date or that may increase to a higher fixed rate=20 at a later date). Because the yield to maturity on Step-Up Debt=20 Securities would be lower if they were called prior to an=20 increase in the stated interest rate, each issue of Step-Up Debt=20 Securities will be treated as maturing on the first permissible=20 call date. If an issue of Step-Up Debt Securities is not in fact=20 called on that date, or is called only in part, the Step-Up Debt=20 Securities (to the extent of their remaining outstanding=20 principal amount) will be deemed to be called and reissued at=20 100% of the then outstanding principal amount. The above rules=20 also apply to any deemed reissued Debt Securities that would be a Step-Up Debt Security if issued on the deemed reissue date. As=20 a result of these special rules, Step-Up Debt Securities do not=20 have any OID solely as a result of the structure of their=20 interest rates. Thus, if you own Step-Up Debt Securities you=20 should take stated interest on such Debt Securities into account=20 under your regular method of accounting.

All stated interest payments on a Debt Security that matures one=20 year or less from the date it is issued (a “Short-Term=20 Obligation”) are included in the stated redemption price at=20 maturity of the Debt Security and, therefore, are treated as OID.

Unless you either are required or elect (as described below) to=20 include OID on a Short-Term Obligation in income currently, if=20 you use the cash method of accounting, which most individual=20 taxpayers do, you must with respect to OID on a Short-Term=20 Obligation:


	•	include OID in income when received;

	•	include in ordinary income any gain realized upon the sale,=20 exchange or retirement of a Short-Term Obligation to the extent=20 of accrued OID (determined on a straight-line basis, unless you=20 make an irrevocable election to determine such accrued OID on=20 the basis of the Debt Security’s yield to maturity and=20 daily compounding); and

	•	defer deductions for interest expense on any indebtedness you=20 incurred or continued to purchase or carry the Short-Term=20 Obligation, in an amount not exceeding the deferred interest=20 income, until you recognize the deferred interest income.

A beneficial owner of a Short-Term Obligation who uses the cash=20 method and who is not otherwise required to account for interest=20 or OID on a Short-Term Obligation as it accrues may elect to=20 include in income OID as it accrues (as if the beneficial owner=20 used the accrual method of accounting, under the rules described in the following paragraph). This election will apply to all debt obligations having a maturity of one year or less that the beneficial owner holds in the taxable year of the election and in all subsequent years. A beneficial owner may revoke the election described in this paragraph only with the consent of the IRS.

If you use the accrual method of accounting, or if you are a=20 bank, regulated investment company or are described in section=20 1281(b) of the federal income tax code, you are required to=20 include OID on a Short-Term Obligation in income as it accrues=20 on a straight-line basis, regardless of your method of=20 accounting. Alternatively, you may make an irrevocable election=20 to accrue such OID on the basis of the Debt Security’s=20 yield to maturity and daily compounding.

In addition, any beneficial owner may make the election=20 described below under “United States Taxation—U.S.=20 Persons—Accrual Method Election” for a Short-Term=20 Obligation. That election is independent of the elections=20 described in the preceding paragraphs.

In certain cases, Step-Up Debt Securities may provide for a=20 fixed interest rate that increases to a higher fixed interest=20 rate exactly one year (or less) after the date of issuance. In=20 such cases, the Step-Up Debt Securities would not be=20 characterized as Short-Term Obligations under the OID=20 Regulations, even though it is presumed for purposes of=20 computing accruals of interest and OID that we will call the=20 Step-Up Debt Securities one year or less after they are issued.

The federal income tax laws are unclear concerning how to=20 determine the amount of interest or OID income accruing on a=20 variable rate Debt Security with a term of one year or less. One=20 method would be to treat the stated interest on such a Debt=20 Security as interest that is taxable as ordinary interest=20 income. Alternatively, the stated interest on a variable rate=20 Debt Security that is also a Short-Term Obligation could be=20 treated as OID under the rules described above for Short-Term=20 Obligations. Generally, the two methods will not produce=20 materially different results.

If you purchase a Debt Security for an amount (net of accrued=20 interest) in excess of its principal amount (or, in the case of=20 a Debt Security with OID, its stated redemption price at maturity) you will have premium with respect to such Debt=20 Security in the amount of such excess. A beneficial owner who=20 purchases a Debt Security at a premium may elect to treat such=20 premium as “amortizable bond premium.” If you make=20 this election, the amount of interest that you must include in=20 income for each accrual period (where such Debt Security is not=20 optionally redeemable prior to its Maturity Date) is reduced by=20 the portion of the premium allocable to such period based on the=20 Debt Security’s yield to maturity. If the amortizable bond premium allocable to an accrual period exceeds the interest allocable to the accrual period, you treat the excess as a bond premium deduction for the accrual period. However, the amount treated as a bond premium deduction is limited to the amount by which your total interest income on the Debt Security in prior accrual periods exceeds the total amount treated by you as a bond premium deduction on the Debt Security in prior accrual periods. If a Debt Security may be called prior to maturity, but after you acquired it, you generally may not assume that the call will be exercised and must amortize premium to the Maturity Date. If the Debt Security is in fact called, you may deduct any unamortized premium in the year of the call. If you make the election described above, the election will apply to all debt instruments the interest on which is not excludible from gross income (“Fully Taxable Bonds”) that you hold at the beginning of the first taxable year to which the election applies and to all Fully Taxable Bonds you later acquire. You may revoke this election only with the consent of the IRS.

If you do not make this election, you must include the full amount of each interest payment in income in accordance with your regular method of accounting and you will receive a tax benefit from the premium only in computing your gain or loss upon the sale or other disposition or retirement of the Debt Security. In the case of a Short-Term Obligation, the election is available only to those cash-method beneficial owners that neither are required nor have elected to account for interest or OID on the Short-Term Obligation as it accrues.

If you purchase a Debt Security with OID at a premium, you are not required to include in income any OID with respect to such Debt Security.

If you purchase a Debt Security with OID for an amount in excess of its adjusted issue price (as defined below) but less than its stated redemption price at maturity, you will have acquisition premium with respect to such Debt Security in the amount of such excess. The “adjusted issue price” of a Debt Security is defined as the sum of the issue price of the Debt Security and the aggregate amount of previously accrued OID, if any, less any prior payments of amounts included in its stated redemption price at maturity.

If you purchase a Debt Security with OID at an acquisition premium, the amount of OID you will include in income in each taxable year will be reduced by that portion of the acquisition premium properly allocable to such year. Unless you make the accrual method election described below in “United States Taxation—U.S. Persons—Accrual Method Election,” acquisition premium is allocated on a pro rata basis to each accrual of OID, so that you are allowed to reduce each accrual of OID by a constant fraction.

If you purchase a Debt Security (other than a Short-Term Obligation) at a price less than its stated redemption price at maturity (or, in the case of a Debt Security with OID, its adjusted issue price) you will have market discount with respect to such Debt Security in the amount of the shortfall. If you purchase a Debt Security with market discount you are required (unless such market discount is less than a de minimis amount) to treat any principal payments on, or any gain realized upon the disposition or retirement of such Debt Security, as interest income to the extent of the market discount that accrued while you held such Debt Security, unless you elect to include such market discount in income on a current basis. Market discount is considered to be de minimis if it is less than one-quarter of one percent of a Debt Security’s stated redemption price at maturity multiplied by the number of complete years to maturity after the beneficial owner acquired such Debt Security. If you dispose of a Debt Security with more than a de minimis amount of market discount in a nontaxable transaction (other than a nonrecognition transaction described in section 1276(c) of the federal income tax code), accrued market discount is includible=20 as ordinary income as if you had sold the Debt Security at its=20 then fair market value.

If you acquire a Debt Security at a market discount and you do=20 not elect to include Market Discount in income on a current=20 basis, you may be required to defer the deduction of a portion=20 of the interest expense on any indebtedness you incurred or=20 continued to purchase or carry the Debt Security until the=20 deferred income is realized.

You may elect to include in gross income your entire return on a=20 Debt Security (i.e., the excess of all remaining payments=20 to be received on the Debt Security over the amount you paid for=20 the Debt Security) based on the compounding of interest at a=20 constant rate. Such an election for a Debt Security with=20 amortizable bond premium (or market discount) will result in a=20 deemed election for all your debt instruments with amortizable=20 bond premium to amortize the premium (or currently include the=20 market discount). You may revoke the accrual method election=20 only with the permission of the IRS.

When you sell, exchange or otherwise dispose of a Debt Security,=20 or when we retire a Debt Security (including by redemption), you=20 will recognize gain or loss equal to the difference, if any,=20 between the amount you realize upon the disposition or=20 retirement and your tax basis in the Debt Security. Your tax basis for determining gain or loss on the disposition or retirement of a Debt Security generally is your U.S. dollar cost of such Debt Security, increased by the amount of OID and any market discount includible in your gross income with respect to such Debt Security, and decreased by the amount of any payments under the Debt Security that are part of its stated redemption price at maturity and by the portion of any premium previously taken into account.

Gain or loss you realize on a disposition or retirement of a=20 Debt Security is capital gain or loss (except to the extent the=20 gain represents accrued interest, OID or market discount on the=20 Debt Security not previously included in gross income, to which=20 extent such gain or loss would be treated as ordinary income).=20 Any capital gain or loss is long-term capital gain or loss if at=20 the time of disposition or retirement you held the Debt Security=20 for more than one year. The deductibility of capital losses is=20 subject to limitations. Tax rates on capital gain for=20 individuals vary depending on the individual’s income and=20 the holding period for the Debt Security. Beneficial owners who=20 are individuals should contact their own tax advisors for=20 information regarding the capital gains tax applicable to an=20 investment in a Debt Security.

If you own redeemable Debt Securities, such as Step-Up Debt=20 Securities, and if a call right that is presumed exercised is=20 not in fact exercised, the deemed reissuance of the Debt=20 Securities for purposes of computing subsequent accruals of=20 interest and OID will not result in a deemed disposition or=20 retirement of the Step-Up Debt Securities.

Special rules govern the taxation of Debt Securities whose=20 interest and principal payments are made in a currency other=20 than U.S. dollars (a “Non-U.S. Currency”) or are=20 determined by reference to a single Non-U.S. Currency.=20 Generally, a beneficial owner will first compute its interest or OID income on such a security in the Non-U.S. Currency and then=20 translate that income into U.S. dollars. The method and timing=20 of the translation will depend on the beneficial owner’s=20 usual method of accounting and whether the Debt Security has OID.

If you are a cash method taxpayer and your interest payment is=20 made in or determined by reference to a Non-U.S. Currency, the=20 amount of income you recognize will be the U.S. dollar value of=20 the interest payment you receive, based on the spot exchange=20 rate on the date you receive it.

If you are an accrual method taxpayer, the amount of income you=20 recognize will be based on the average exchange rate during the=20 interest accrual period. When an accrual period includes parts=20 of two taxable years, which will occur whenever a payment of=20 interest is not due on the last day of your taxable year, the=20 exchange rate you will use to determine your income for that=20 portion of the accrual period in each of the years will be the=20 average exchange rate for the portion of the accrual period in=20 that year.

Alternatively, an accrual method taxpayer may elect to use the=20 exchange rate in effect on the last day of the accrual period to=20 translate interest income into U.S. dollars. When an accrual=20 period includes parts of two taxable years, you will determine=20 your income for that portion of the accrual period in the first=20 taxable year based on the exchange rate in effect at the end of=20 the year, and you will use the exchange rate in effect at the=20 end of the accrual period to determine your income for that=20 portion of the accrual period in the second year. If the payment=20 of interest is made or received within five business days of the=20 last day of the accrual period or taxable year, that taxpayer=20 instead may use the exchange rate in effect on the day the=20 payment is received to translate such accrued interest into U.S.=20 dollars. If you make this election, it will apply to all debt=20 instruments you hold at the beginning of the first taxable year=20 to which the election applies or thereafter acquired. You may=20 revoke the election only with the consent of the IRS.

When you receive an interest payment denominated in or=20 determined by reference to a Non-U.S. Currency (including a=20 payment attributable to accrued but unpaid interest you receive=20 when you sell a Debt Security or we retire it), you will=20 recognize ordinary income or loss due to changes in exchange=20 rates, which will be measured by the difference between the=20 amount of interest income accrued and the value of the interest=20 payment received.

If all of the payments on a Debt Security with OID are=20 determined by reference to a single Non-U.S. Currency, a=20 beneficial owner will compute the accruals of OID in that=20 Non-U.S. Currency. The accruals will then be translated into=20 U.S. dollars under the rules described above for accrual method=20 beneficial owners. The rules in this paragraph apply to both=20 cash method beneficial owners and accrual method beneficial=20 owners.

When you sell, exchange or otherwise dispose of a Debt Security,=20 or when we retire a Debt Security (including by redemption), you=20 will recognize gain or loss equal to the difference, if any,=20 between the amount you realize upon the disposition or=20 retirement and your tax basis in the Debt Security. The amount=20 you realize on a disposition or retirement when you are paid an=20 amount in a Non-U.S. Currency will be the U.S. dollar value of=20 that amount either on the date of disposition or retirement or=20 on the settlement date, the latter applying only in the case of=20 a Debt Security traded on an established securities market and=20 sold by a cash method taxpayer or an electing accrual method=20 taxpayer. If you are paid in U.S. dollars upon the disposition=20 or retirement of a Debt Security payable by its terms in a=20 Non-U.S. Currency, that amount may not be the same as the amount=20 you realize for tax purposes, which is described in the=20 preceding sentence.

Your tax basis for determining gain or loss on the disposition=20 or retirement of a Debt Security will be your U.S. dollar cost=20 of such Debt Security, increased by the amount of OID and market=20 discount includible in your gross income from the Debt Security,=20 and decreased by the amount of any payments under the Debt=20 Security that are part of its stated redemption price at=20 maturity and by the portion of any premium previously taken into=20 account. The U.S. dollar cost of Debt Securities purchased with=20 Non-U.S. Currency generally will be the U.S. dollar value of the=20 purchase price either on the date of purchase or on the=20 settlement date for the purchase, the latter applying only in=20 the case of Debt Securities traded on an established securities=20 market and purchased by a cash method taxpayer or an electing=20 accrual method taxpayer. If you purchase a Debt Security by=20 converting U.S. dollars into the Non-U.S. Currency in which that=20 Debt Security is payable, the U.S. dollar amount so converted=20 may not be the same as the U.S. dollar value of the purchase=20 price on the date of purchase or settlement, which, as described=20 in the preceding sentence, is used to calculate your tax basis.

Gain or loss you realize on a disposition or retirement of a=20 Debt Security will be capital gain or loss, with two exceptions:=20 (1) to the extent the gain represents accrued interest, OID=20 or market discount on the Debt Security not previously included=20 in gross income or (2) to the extent the gain or loss is=20 attributable to changes in exchange rates. To the extent gain or=20 loss falls into these exceptions, such gain or loss would be=20 ordinary income. More information about the treatment of capital=20 gains and losses is described above under “U.S.=20 Persons—Disposition or Retirement of Debt Securities.”

Non-U.S. Currency you receive as interest on a Debt Security or=20 on the disposition or retirement of a Debt Security will have a=20 tax basis equal to its U.S. dollar value at the time you receive=20 the interest or at the time of the disposition or retirement.=20 Non-U.S. Currency you purchase generally will have a tax basis=20 equal to the U.S. dollar value of such Non-U.S. Currency on the=20 date of purchase. Any gain or loss recognized on a sale or other=20 disposition of a Non-U.S. Currency (for example, if you use it=20 to purchase Debt Securities or exchange it for U.S. dollars)=20 will be ordinary income or loss.

A conversion of an amount payable on a Debt Security from a=20 national currency of a participating member state of the=20 European Union (“legacy currencies”) to the Euro will=20 not be treated as an event giving rise to the recognition of=20 gain or loss for federal income tax purposes. Similarly, the=20 conversion of an amount paid on a Debt Security from a legacy=20 currency into Euro will not be a recognition event.

Under federal income tax law, each time an Interest or Principal=20 Component of an Eligible Debt Security is bought, that Component=20 will be treated as if it had been issued to the new beneficial=20 owner on the date of the ownership change for an issue price=20 equal to the purchase price paid by the new beneficial owner for=20 the Component. Accordingly, the tax consequences to a beneficial=20 owner of an Interest or Principal Component are determined as if=20 the Component were a Debt Security issued on the date of=20 acquisition or, in the case of a Component maturing one year or=20 less from the date of acquisition, a Short-Term Obligation=20 issued on that date. The stated redemption price at maturity of=20 an Interest or Principal Component is the amount payable on that=20 Component (or the sum of all amounts payable, in the case of=20 certain Principal Components calling for more than one payment).

Special rules apply to Principal Components of Eligible Debt=20 Securities, such as Step-Up Debt Securities, that we may redeem=20 before they mature (“Callable Principal Components”).=20 As described above in “United States Taxation—U.S.=20 Persons—Debt Securities That We May Redeem Before=20 Maturity,” if a debt instrument may be called prior to its=20 maturity, a presumption is made that the call will be exercised=20 if the yield to the call date is less than the yield to=20 maturity. In applying this rule to a Callable Principal=20 Component, it is not clear whether this determination is to be=20 made separately for the Callable Principal Component or with=20 respect to the underlying Eligible Debt Securities. If the call=20 is presumed to be exercised, but is not exercised in fact, the=20 Callable Principal Component is treated, solely for purposes of=20 accruing OID, as if the call had been exercised and a new=20 Eligible Debt Security issued on the presumed exercise date for=20 an amount equal to the call price. In such event, the interest=20 payments on the new Debt Security should be treated as interest=20 in accordance with the beneficial owner’s normal method of=20 accounting. If, conversely, the call is presumed not exercised=20 and in fact is exercised, then the Callable Principal Component=20 is considered to have been redeemed prior to maturity.

A beneficial owner of an Eligible Debt Security is taxed on=20 income from the Debt Security as if the ability to=20 “strip” the Debt Security did not exist, unless and=20 until both the Eligible Debt Security is stripped and the=20 beneficial owner disposes of some or all of the resulting=20 Components. The mere exchange of an Eligible Debt Security for=20 Interest and Principal Components, without the disposition of=20 any of those Components, should not be treated as a taxable=20 event. If you exchange an Eligible Debt Security for Interest=20 and Principal Components and dispose of all of those Components,=20 you effectively will be treated as if you had disposed of the=20 Eligible Debt Security. See “United States Taxation—U.S. Persons—Disposition or Retirement of Debt Securities.” If you dispose of less than all the Components=20 resulting from the stripping transaction, you will be required=20 to take the following steps:


	•	include as income all interest and market discount accrued on=20 the Eligible Debt Security not previously included as income,

	•	increase your basis in the Debt Security by the same amount,

	•	allocate your adjusted basis in the Debt Security among the Components in proportion to the respective fair market values of those Components, and

	•	recognize gain or loss with respect to each disposition of a Component equal to the difference between the amount realized and the basis allocated to that Component.

Generally, any gain or loss on the disposition of an Interest or Principal Component is capital gain or loss.

You will be taxed on each retained Component as if you had purchased the retained Component for an amount equal to the basis allocated to that Component.

Ownership of Pro Rata Share of Outstanding = Interest and Principal Components

If you purchase the same pro rata share of Principal Components and the related unmatured Interest Components, while the matter is not free from doubt, it appears that you should treat each Component separately, rather than as a combined Eligible Debt Security. You may purchase the same pro rata share of Principal Components and the related Interest Components and request the FRBNY to reconstitute such Components as an Eligible Debt Security. While the matter again is not free from doubt, it appears that you should not treat the reconstitution as a taxable exchange and you should continue to treat each Component separately. The IRS could assert, however, that combined treatment as an Eligible Debt Security should apply to an investor owning a pro rata share of all outstanding Components or that combined treatment applies once there has been a reconstitution.

If you own a Debt Security and are a non-U.S. Person, each payment of interest (including OID, if any) on the Debt Security will be subject to a 30 percent U.S. withholding tax, unless


	•	you meet the general exemption for non-U.S. Persons,

	•	you meet the requirements for a reduced rate of withholding under a treaty, or

	•	the interest is “effectively connected” to a business you conduct in the United States, in each case as further described below.

In certain circumstances, you may be able to claim amounts that are withheld as a refund or as a credit against your U.S. federal income tax.

General Exemption for Non-U.S. Persons. Payments of interest on a Debt Security to any non-U.S. Person are exempt from U.S. withholding taxes if you satisfy the following conditions:


	(1) the last U.S. payor in the chain of payment prior to payment to a non-U.S. Person (the “Withholding Agent”) has received in the year in which such payment occurs, or in either of the two preceding years, a statement signed by you under penalties of perjury that certifies that you are not a U.S. Person and provides your name, address and taxpayer identification number, if any;

	(2) the Withholding Agent and all intermediaries between you and the Withholding Agent do not know or have reason to know that your non-U.S. beneficial ownership statement is false; and

	(3) you are not (a) a bank that receives payments on the Debt Securities that are described in section 881(c)(3)(A) of the federal income tax code, (b) a 10 percent shareholder of Fannie Mae within the meaning of section 871(h)(3)(B) of the federal income tax code, or (c) a “controlled foreign corporation” related to Fannie Mae within the meaning of section 881(c)(3)(C) of the federal income tax code.

You may make the non-U.S. beneficial ownership statement on an IRS Form W-8BEN or a substantially similar substitute form. You must inform the Withholding Agent (or the last intermediary in the chain between you and the Withholding Agent) of any change in the information on the statement within 30 days of the change. If you hold a Debt Security through a securities clearing organization or certain other financial institutions, the organization or institution may provide a signed statement to the Withholding Agent on your behalf. In such case, however, the signed statement must be accompanied by a copy of a Form W-8BEN or substitute form provided by you to the organization or institution. In all cases, the Form W-8BEN or substitute form must be filed by the Withholding Agent with the IRS. The U.S. Treasury Department is empowered to publish a determination that a beneficial ownership statement from any person or class of persons will not be sufficient to preclude the imposition of U.S. federal withholding tax with respect to payments of interest made at least one month after the publication of such determination.

Exemption or Reduced Withholding Rate for Non-U.S. Persons Entitled to the Benefits of a Treaty. If you are entitled to the benefit of an income tax treaty to which the United States is a party you can obtain an exemption from or reduction of income and withholding tax (depending on the terms of the treaty) by providing to the Withholding Agent a properly completed IRS Form W-8BEN, or any successor form, before interest is paid. However, neither exemption nor reduced withholding will be available if the Withholding Agent has actual knowledge that the form is false.

Exemption for Non-U.S. Persons with Effectively Connected Income. If the interest you earn on a Debt Security is “effectively connected” to a business you conduct in the United States, you can obtain an exemption from withholding tax by providing to the Withholding Agent a properly completed IRS Form W-8ECI, or any successor form, prior to the payment of interest, unless the Withholding Agent has actual knowledge that the form is false. Payments of interest on a Debt Security exempt from the withholding tax as effectively-connected income nevertheless may be subject to graduated U.S. federal income tax as if such amounts were earned by a U.S. Person.

Short-Term Notes. Special rules may apply to certain Short-Term Notes payable in full within 183 days after the date of original issue which are sold under arrangements reasonably designed to ensure that they will be sold only to persons who are not U.S. persons. See Appendix B, “Benchmark Bills and Short-Term Notes—United States Taxation.”

Partnerships and Other Pass-through Entities. Under recently issued Treasury Regulations, a payment to a foreign partnership is treated, with some exceptions, as a payment directly to the partners, so that the partners are required to provide any required certifications. If you hold a Debt Security through a partnership or other pass-through entity, you should consult your own tax advisors regarding the application of these Treasury Regulations to your situation.

Except as provided below in “United States = Taxation—Information Reporting and Backup Withholding,” a non-U.S. Person (other than certain nonresident alien individuals present in the United States for a total of 183 days or more during his or her taxable year) will not be subject to U.S. federal income tax, and no withholding of such tax will be required, with respect to any gain that is realized on the disposition or retirement of a Debt Security.

If you are a non-U.S. Person and are not domiciled in the United States, the Debt Securities will not be includible in your estate if interest paid (including OID, if any) on the Debt Securities to you at the time of your death would have been exempt from U.S. federal income and withholding tax as described above under “United States Taxation—Non-U.S. Persons—Interest and OID—General Exemption for Non-U.S. Persons” (without regard to the requirement that a non-U.S. beneficial ownership statement be received).

Payments of interest (including OID, if any) on Debt Securities held by U.S. Persons other than corporations and other exempt holders are required to be reported to the IRS.

Backup withholding of U.S. federal income tax at a rate of 31 percent may apply to payments made in respect of the Debt Securities, as well as payments of proceeds from the sale of Debt Securities. Backup withholding will apply on such payments to holders or beneficial owners that are not “exempt recipients” and that fail to provide certain identifying information (such as their taxpayer identification numbers) in the manner required. Individuals generally are not exempt recipients, whereas corporations and certain other entities generally are exempt recipients.

If a Debt Security is sold before its Maturity Date to (or through) a broker, the broker may be required to withhold 31 percent of the entire sale price. The broker will not withhold if either the broker determines that the seller is a corporation or other exempt recipient or the seller provides, in the required manner, certain identifying information and, in the case of a non-U.S. Person, certifies that such seller is a non-U.S. Person (and certain other conditions are met). The broker must report such a sale to the IRS unless the broker determines that the seller is an exempt recipient or the seller certifies its non-U.S. status (and certain other conditions are met). Certification of the beneficial owner’s non-U.S. status normally would be made on IRS Form W-8BEN under penalties of perjury, although in certain cases it may be possible to submit certain other signed forms. The term “broker,” as defined by Treasury regulations, includes all persons who, in the ordinary course of business, stand ready to effect sales made by others. This information reporting requirement generally will apply to a U.S. office of a broker and to a foreign office of a U.S. broker, as well as to a foreign office of a foreign broker (i) that is a “controlled foreign corporation” within the meaning of section 957(a) of the federal income tax code, (ii) 50 percent or more of whose gross income from all sources for the three-year period ending with the close of its taxable year preceding the payment (or for such part of the period that the foreign broker has been in existence) was effectively connected with the conduct of a trade or business within the United States, or (iii) (in the case of payments made after December 31, 2000) that is a foreign partnership with certain connections to the United States, unless such foreign office has both documentary evidence that the seller is a non-U.S. Person and no actual knowledge that such evidence is false.

A beneficial owner may claim any amounts withheld under the backup withholding rules as a refund or a credit against the beneficial owner’s U.S. federal income tax, provided that the required information is furnished to the IRS. Furthermore, the IRS may impose certain penalties on a holder or beneficial owner who is required to supply information but who does not do so in the proper manner.

Payments of interest (including payments of OID, if any) on a Debt Security that is beneficially owned by a non-U.S. Person will be reported annually on IRS Form 1042-S, which the Withholding Agent must file with the IRS and furnish to the beneficial owner.

The U.S. federal tax discussion set forth above is included for your general information only and may not apply in your particular situation. You should consult your own tax advisors with respect to the tax consequences of your purchase, ownership and disposition of the Debt Securities, including the tax consequences under the tax laws of the United States, states, localities, countries other than the United States and any other taxing jurisdictions and the possible effects of changes in such tax laws.

We will offer the Debt Securities to or through the Dealers under the terms and conditions set forth in a Dealer Agreement (the “Dealer Agreement”) among us and the Dealers listed on page 48. Under the terms of the Dealer Agreement, we may add other securities dealers or banks in connection with the distribution of the Debt Securities or any particular issue of Debt Securities. Those securities dealers or banks, together with the Dealers named herein, are referred to in this Offering Circular collectively as the “Dealers.”

We will offer and sell Benchmark Bills and Short-Term Notes through the Dealers as described under “Distribution of Benchmark Bills and Short-Term Notes” in Appendix B.

We will sell Debt Securities primarily to Dealers as principal,=20 either individually or as part of a syndicate. These sales may=20 be by auction or other methods. Dealers will resell Debt=20 Securities to investors at a fixed offering price or at variable=20 offering prices related to market prices prevailing at the time=20 of resale. Except in certain circumstances, Dealers may sell the=20 Debt Securities to other dealers at a concession, in the form of=20 a discount, to be received by other Dealers. The concession may=20 be all or a portion of the underwriting compensation. Dealers=20 will advise us whether an offering is on a fixed price or=20 variable price basis and of any concessions or reallowances that=20 will be provided to other dealers. We will include that=20 information, as provided by the Dealers, in the applicable=20 Pricing Supplement. After an initial offering of Debt=20 Securities, the offering price (in the case of a fixed price=20 offering), the concession and the reallowance may change.

We may authorize Dealers to solicit customer offers to purchase=20 Debt Securities on a non-underwritten basis on terms we=20 determine. Dealers have agreed to use their best efforts when=20 soliciting non-underwritten sales. Dealers also may approach us=20 on behalf of investors and other purchasers with offers to=20 purchase Debt Securities on a non-underwritten basis. We will=20 sell Debt Securities on a non-underwritten basis at 100% of the=20 principal amount, unless we specify otherwise in the applicable=20 Pricing Supplement. We will pay the Dealers through whom a Debt=20 Security is sold a commission in an amount specified in the=20 applicable Pricing Supplement. The commission will be expressed=20 as a percentage of the principal amount of the Debt Securities=20 (or the initial offering price for Zero-Coupon Debt Securities=20 and certain other Debt Securities sold at a discount). We will=20 have the sole right to accept offers to purchase Debt Securities=20 and may reject all or a portion of any offer. Each Dealer will=20 have the right, using reasonable discretion, to reject all or a=20 portion of any offer to purchase Debt Securities solicited on a non-underwritten basis.

We also may sell Debt Securities directly to investors on our=20 own behalf. We will not pay a commission to any Dealer on direct=20 sales.

We have applied for certain Debt Securities issued under this=20 Universal Debt Facility to be listed on the Luxembourg Stock=20 Exchange. We also may issue unlisted Debt Securities and Debt=20 Securities listed on other exchanges. The Pricing Supplement=20 will identify any exchange to which an initial listing=20 application will be made.

There may be no established trading market for Debt Securities=20 when issued. Dealers have agreed to use their best efforts to=20 facilitate secondary market transactions in each issue of Debt=20 Securities for which they were a participating Dealer, but a secondary market may not develop. If a secondary market=20 develops, it may not be very liquid. See “Risk=20 Factors—Risks Related to Market, Liquidity and Yield.”

Dealers have agreed to provide certain indicative pricing=20 information to Bloomberg L.P. or another information service=20 designated by us for Benchmark Securities. Dealers will be=20 solely responsible for the indicative information so provided,=20 which is indicative of, but may not reflect actual, secondary=20 market prices.

When Dealers purchase Debt Securities as principal for resale on=20 a fixed price basis they may engage in certain transactions that=20 stabilize the price of the Debt Securities. Such transactions=20 may consist of bids or purchases for the purpose of pegging,=20 fixing or maintaining the price of the Debt Securities. Such=20 transactions with respect to the Debt Securities may also include over-allotment transactions and purchases to cover short=20 positions created by the Dealers in connection with an offering.

If the Dealers create a short position in the Debt Securities in=20 connection with an offering, i.e., if they sell a greater=20 aggregate principal amount of the Debt Securities than is set=20 forth in the applicable Pricing Supplement, the Dealers must=20 reduce that short position by purchasing Debt Securities in the=20 open market. A short position is more likely to be created if=20 the Dealers are concerned that there may be downward pressure in=20 the price of the Debt Securities in the open market after=20 pricing that could adversely affect investors who purchase Debt=20 Securities in an offering. In general, purchases of a security=20 for the purpose of stabilization or to reduce a short position=20 could cause the price of the security to be higher than it might=20 be in the absence of such purchases.

In connection with any particular issue of Debt Securities, we=20 may enter into swaps, other hedging transactions or reverse=20 repurchase transactions with, or arranged by, the applicable=20 Dealer or an affiliate. The Dealer or other parties may receive=20 compensation, trading gain, temporary funding or other benefits from these transactions. We also may from time to time engage in=20 other hedging activities or reverse repurchase transactions=20 involving Debt Securities, in the open market or otherwise. We=20 are not required to engage in any of these transactions. If we=20 commence these transactions, we may discontinue them at any=20 time. Counterparties to these hedging activities also may engage=20 in market transactions involving Debt Securities.

Neither we nor the Dealers make any representation or prediction=20 as to the direction or magnitude of any effect that the=20 transactions described in the three preceding paragraphs may=20 have on the price of Debt Securities.

Neither we nor the Dealers have authorized anyone to give you=20 any information or to make any representation not contained in=20 this Offering Circular or an applicable Pricing Supplement or=20 other applicable supplement. Neither delivery of this Offering Circular, any Pricing Supplement or any other supplement nor any=20 sale of Debt Securities shall imply that there has been no=20 change in our affairs since the dates of those documents.=20 Information in those documents may not be correct as of any time=20 subsequent to the date of the information.

The purchase price of Debt Securities must be paid to us in=20 immediately available funds. Your payment will be effective only=20 upon our receipt of the funds. In a non-underwritten sale, the=20 Dealer will act on behalf of the purchaser of Debt Securities in=20 transmitting the purchaser’s funds to us.

We and the Dealers have agreed to indemnify each other against,=20 and contribute toward, certain liabilities.

Purchasers of Debt Securities may be required to pay stamp taxes=20 and other charges in accordance with the laws and practices of=20 the country of purchase. We do not, and any Dealer does not,=20 represent that the Debt Securities may be sold lawfully at any=20 time in compliance with any applicable registration or other=20 requirements in any jurisdiction, or pursuant to an available exemption, nor do we or any Dealer assume any responsibility for=20 facilitating those sales.

From time to time, Fannie Mae may request, and the Dealers may=20 disclose to Fannie Mae, the identity of the purchasers of Debt=20 Securities and volume and pricing information for secondary=20 market transactions, including repurchase transactions. Fannie=20 Mae will use the information for internal purposes only, and=20 make no further disclosure of it.

The Dealers and their affiliates engage in transactions with us=20 and perform services for us in the ordinary course of business.

The following securities dealers and banks currently may act as=20 Dealers under the Universal Debt Facility. Other securities=20 dealers and banks may be added from time to time in connection with the distribution of the Debt Securities or any particular=20 issue of Debt Securities. As noted above, any applicable Pricing=20 Supplement will identify any applicable Dealer or Dealers for an=20 issue of Debt Securities.

Donaldson, Lufkin & Jenrette Securities Corporation

Merrill Lynch, Pierce, Fenner & Smith Incorporated

The Debt Securities may be offered or sold only where it is=20 legal to do so. The Dealers have represented and agreed that=20 they will comply with all applicable laws and regulations in=20 each jurisdiction in which they may purchase, offer, sell or=20 deliver Debt Securities or distribute this Offering Circular,=20 any Pricing Supplement or any other offering material. The=20 Dealers also have agreed to comply with certain selling=20 restrictions relating to certain countries. A description of=20 some of those restrictions, as in effect as of the date of this=20 Offering Circular, are set forth in Appendix E. We and the=20 Dealers may modify selling restrictions at any time.

Brown & Wood LLP, New York, New York, will pass upon the=20 validity of the Debt Securities for Fannie Mae. Sullivan &=20 Cromwell, Washington, D.C., will pass upon the validity of the=20 Debt Securities for the Dealers. Arnold & Porter,=20 Washington, D.C., will pass upon U.S. federal income tax matters=20 for Fannie Mae.

Application has been made for Debt Securities issued under this=20 Universal Debt Facility through January 22, 2002 to be=20 listed on the Luxembourg Stock Exchange. The Luxembourg Stock=20 Exchange has allocated the number 9170 to the Universal Debt=20 Facility for listing purposes. As of the date of this Offering=20 Circular, Debt Securities with maturities of less than seven=20 days may not be listed on the Luxembourg Stock Exchange. In connection with the listing, our Charter Act and bylaws and a=20 legal notice relating to the issuance of Debt Securities have=20 been deposited with the Chief Registrar of the District Court of=20 Luxembourg, where copies may be inspected or obtained upon=20 request. Holders also may obtain, free of charge, the documents=20 incorporated in this Offering Circular by reference from the=20 Luxembourg Listing Agent. Copies of the Fiscal Agency Agreement=20 and the Global Agency Agreement will be available for inspection=20 by Holders at the office of the Luxembourg Listing Agent during=20 the term of the Debt Securities.

So long as Debt Securities are listed on the Luxembourg Stock=20 Exchange, we will maintain in Luxembourg an intermediary to=20 respond to inquiries from Holders of Debt Securities. Banque=20 Internationale à Luxembourg S.A. initially has been=20 appointed as the intermediary.

Our issuance of the Debt Securities is authorized pursuant to=20 the actions of our Board of Directors on February 19, 1980=20 and November 19, 1985. In August 1996, the U.S. Treasury=20 Department approved our issuance of an unlimited amount of Debt=20 Securities.

As of the date of this Offering Circular, we have no litigation,=20 actual or pending, that is material in the context of the issuance of the Debt Securities.

As of the date of this Offering Circular, there has been no=20 material adverse change in our financial position since=20 December 31, 2000.

We have given an undertaking in connection with the listing of=20 the Debt Securities on the Luxembourg Stock Exchange to the=20 effect that, so long as any Debt Securities remain outstanding=20 and listed on the Exchange, in the event of any material adverse=20 change in our business or our financial position that is not=20 reflected in the Information Statement as then amended or=20 supplemented, we will prepare an amendment or supplement to the=20 Information Statement or publish a new Information Statement for=20 use in connection with any subsequent offering and listing by us of the Debt Securities.

Fannie Mae is a federally chartered and stockholder-owned=20 corporation organized and existing under the Federal National=20 Mortgage Association Charter Act, 12 U.S.C. §1716 et=20 seq. (the “Charter Act”). See “Government=20 Regulation and Charter Act” in the Information Statement.=20 We are the largest investor in home mortgage loans in the United=20 States. We were established in 1938 as a United States=20 government agency to provide supplemental liquidity to the=20 mortgage market and were transformed into a stockholder-owned=20 and privately managed corporation by legislation enacted in 1968.

Fannie Mae also issues mortgage-backed securities=20 (“MBS”), receiving guaranty fees for our guarantee of timely payment of principal and interest on MBS certificates. We=20 issue MBS primarily in exchange for pools of mortgage loans from=20 lenders. The issuance of MBS enables us to further our statutory=20 purpose of increasing the liquidity of residential mortgage=20 loans.

Fannie Mae’s principal office is located at 3900 Wisconsin=20 Avenue, N.W., Washington, D.C. 20016 (telephone:=20 (202) 752-7000).

For the purpose of calculating the ratio of earnings to fixed=20 charges, “earnings” consist of income (before federal=20 income taxes and extraordinary items) and fixed charges.=20 “Fixed charges” represents interest expense.

We will use the net proceeds from the sale of the Debt=20 Securities to retire our outstanding debt securities or add the=20 proceeds to our working capital and use them for general corporate purposes. We anticipate the need for additional=20 financing from time to time, including financing through various=20 types of debt securities. The amount and nature of the financing=20 will be dependent upon a number of factors, including the volume=20 of our maturing debt obligations, the volume of mortgage loan=20 prepayments, the volume and type of mortgage loans we purchase,=20 and general market conditions.

The following selected financial data for the years 1996 through=20 2000 (which data are not covered by the independent=20 auditors’ report) have been summarized or derived from our=20 audited financial statements for 1996 through 1999 and from our=20 unaudited financial statements for the year ended=20 December 31, 2000 and other financial information for such periods. These data are unaudited and include, in the opinion of=20 management, all adjustments (consisting of normal recurring=20 accruals) necessary for a fair presentation. These data should=20 be read in conjunction with the audited financial statements and=20 notes to the financial statements contained in the Information=20 Statement incorporated herein by reference.


	We frequently issue debentures, notes and other debt=20 obligations. The amount of debentures, notes, and other debt=20 obligations outstanding, and stockholders’ equity, on any=20 date subsequent to December 31, 2000 may differ from that=20 shown in the table above.

We are incorporating by reference in this Offering Circular=20 documents listed below that we publish from time to time. This=20 means that we are disclosing information to you by referring you=20 to those documents. Those documents are considered part of this=20 Offering Circular, so you should read this Offering Circular,=20 and any applicable supplements or amendments, together with=20 those documents.

You should rely only on the information provided or incorporated=20 by reference in this Offering Circular and any applicable=20 supplement, and you should rely only on the most current=20 information.

The following documents are incorporated by reference in this=20 Offering Circular:


	•	the Information Statement dated March 30, 2000

	•	the Supplements dated May 15, 2000, August 14, 2000,=20 November 14, 2000 and January 19, 2001 to that=20 Information Statement

	•	any later supplements to the current Information Statement, any=20 subsequent Information Statement and supplements and any proxy=20 statement published prior to the termination of the offering of=20 the Debt Securities

The Information Statement contains important financial and other=20 information about Fannie Mae. We publish the Information=20 Statement annually and update it from time to time to reflect=20 quarterly and annual financial results and as we otherwise=20 determine. The term “Information Statement” as used in=20 this Offering Circular means the most recent Information=20 Statement published while offers are being made under this=20 Offering Circular, together with any supplements to that=20 Information Statement.

You can read the Information Statement, proxy statements and=20 other information about Fannie Mae at the offices of the New=20 York Stock Exchange, the Chicago Stock Exchange and the Pacific=20 Exchange. Since we are not subject to the periodic reporting=20 requirements of the Securities Exchange Act of 1934, as amended,=20 we do not file reports or other information with the U.S.=20 Securities and Exchange Commission.

You can obtain copies of the Information Statement, this=20 Offering Circular, pricing supplements and other supplements or=20 amendments to this Offering Circular and all documents=20 incorporated in this Offering Circular by reference without=20 charge from our Office of Investor Relations, Fannie Mae, 3900=20 Wisconsin Avenue, N.W., Washington, D.C. 20016 (telephone:=20 (202) 752-7115) and, if and so long as any Debt Securities=20 are listed on the Luxembourg Stock Exchange, from Banque=20 Internationale à Luxembourg S.A., 69, route d’Esch,=20 L-2953 Luxembourg (telephone: (352) 45 90 1).

You can obtain copies of this Offering Circular and any=20 supplements or amendments from the Dealers where lawful to do=20 so. In connection with the initial distribution of an issue of=20 Debt Securities other than Benchmark Bills and Short-Term Notes,=20 you also should obtain the applicable Pricing Supplement from=20 the Dealers for the issue.

The following information is available from Fannie Mae by=20 accessing our World Wide Web site at www.fanniemae.com or=20 calling us at (800) 701-4791 (for international callers,=20 (202) 752-5499).


	•	This Offering Circular

	•	The Information Statement

	•	Pricing Supplements

	•	The current interest rate on variable rate Debt Securities

We supply this material only for informational purposes. We may=20 discontinue providing it at any time without notice. You should=20 contact a Dealer or other appropriate securities dealer or bank=20 to obtain the appropriate Offering Circular, Pricing Supplement and other information.

Set forth below, for informational purposes only, is a general=20 description of our Benchmark Securities program. We may change=20 the details of the program from time to time, and any changes=20 may not be reflected in an amendment or supplement to the=20 Offering Circular. The specific terms of Benchmark Securities=20 are contained in the Offering Circular of which this Appendix=20 forms a part, and any applicable Pricing Supplements or other=20 supplements to the Offering Circular.


	•	Benchmark Bills—non-callable Debt Securities with=20 maturities of 360 days or less and sold at a discount from their=20 principal amount payable at maturity

	•	Benchmark Notes—non-callable Debt Securities with=20 maturities of one to ten years

	•	Callable Benchmark Notes—callable Debt Securities with=20 maturities of one to ten years

	•	Subordinated Benchmark Notes—non-callable Subordinated=20 Debt Securities with maturities of one to ten years

	•	Benchmark Bonds—non-callable Debt Securities with=20 maturities of more than ten years

We plan to issue Benchmark Securities in large issues on a=20 regularly scheduled basis. All Benchmark Securities are U.S. dollar denominated. Fannie Mae has announced its plans for=20 issuance of certain Benchmark Securities in year 2001, which=20 includes:


	•	Three-month and six-month Benchmark Bill issuances on a weekly=20 basis

	•	One-year Benchmark Bill issuances on a bi-weekly basis

	•	Two- or three-year Benchmark Note issuances in February, March,=20 May, August, September and November

	•	Five-year Benchmark Note issuances in February, April, June,=20 August, October and December

	•	Ten-year Benchmark Note issuances in January, March, May, July,=20 September and November

	•	Thirty-year Benchmark Bond issuances in January, April, July and=20 October

	•	Subordinated Benchmark Note issuances on a quarterly basis

Issuances may be new issues or reopenings of existing issues.=20 The schedule of anticipated Benchmark Securities issuances, as=20 well as more recently announced updates of our financing plans,=20 are available on our World Wide Web site, www.fanniemae.com.

Settlement of Benchmark Securities issues is made through the=20 Fed Book-Entry System, on the same basis as for other Fed=20 Book-Entry Securities. See “Clearance and Settlement”=20 in the Offering Circular.

Benchmark Notes, Callable Benchmark Notes and Benchmark Bonds=20 may be strip-eligible. See “Description of the Debt=20 Securities—Eligibility for Stripping of Fed Book-Entry=20 Securities” in the Offering Circular.

Set forth below is information about our Benchmark Bills and Short-Term Notes. (See also Appendix A for a more general description of our Benchmark Securities program). Except as set forth in this Appendix, the general description of Debt Securities set forth in the Offering Circular applies to Benchmark Bills and Short-Term Notes. Unless otherwise specified, cross-references are to sections in the Offering Circular of which this Appendix forms a part and capitalized terms are used as defined in the Offering Circular. This Appendix is hereby incorporated in and made a part of the Offering Circular. Pricing Supplements will not be prepared for Benchmark Bills or Short-Term Notes.

The principal aspects of U.S. federal income tax treatment of=20 Benchmark Bills and Short-Term Notes are set forth in the=20 Offering Circular. However, some Short-Term Notes having a=20 maturity of 183 days or less will be sold under=20 arrangements reasonably designed to ensure that they will be=20 sold (or resold in connection with their original issuance) only=20 to persons who are not U.S. Persons (“183 Day Notes”).=20 This section provides a discussion of the U.S. federal income=20 tax treatment of 183 Day Notes held by non-U.S. Persons.

Payments of principal of, and interest (including original issue=20 discount) on, a 183 Day Note to any person who is not a U.S.=20 Person will not be subject to United States federal withholding=20 or income tax.

Backup withholding and information reporting will not apply to=20 payments on 183 Day Notes provided, in each case, that we or our=20 paying agent do not have actual knowledge that the payee is a=20 United States person and certain other requirements are met.=20 Accordingly, payments on 183 Day Notes will be made only outside=20 the United States or its possessions. In addition, 183 Day Notes=20 will be registered in the name of an exempt recipient, generally=20 Euroclear or Clearstream, and 183 Day Notes will bear the=20 following legend: “By accepting this obligation, the holder=20 represents and warrants that it is not a United States person=20 (other than an exempt recipient described in section 6049(b)(4)=20 of the Internal Revenue Code and the regulations thereunder) and=20 that it is not acting for or on behalf of a United States person=20 (other than an exempt recipient described in section 6049(b)(4)=20 of the Internal Revenue Code and the regulations=20 thereunder).”

Benchmark Bills and Short-Term Notes typically will be offered=20 initially at fixed prices representing a discount from the=20 principal amount payable at maturity, with the amount of the=20 discount based, in part, on the maturity of the Benchmark Bills=20 or Short-Term Notes. We may sell Debt Securities to Dealers=20 acting as principal or through Dealers on a non-underwritten=20 basis. We also may sell Debt Securities directly to investors.=20 Benchmark Bills and Short-Term Notes sold to Dealers as=20 principal may be resold to investors at a fixed offering price=20 or at varying prices related to market prices prevailing at the=20 time of resale or otherwise as determined by the applicable=20 Dealer. Offering prices may be established through the posting=20 of rates, negotiations with dealers, auctions (which may include=20 standard auctions, Dutch auctions and other formats) or=20 otherwise.

We will post discount rates for Short-Term Notes, and the range=20 of maturities offered, on market information screens. We=20 generally will offer Short-Term Notes each business day through=20 the Dealers, and there may be more than one sale on a given day.

In order to facilitate overnight confirmation of sales to=20 investors abroad, Short-Term Notes also generally are sold=20 before and after our business hours (except holidays and=20 weekends) to one or more of the Dealers as principal. The=20 Dealers may resell the Short-Term Notes to investors or to other=20 dealers we may authorize from time to time.

Dealers will receive compensation (in the form of a discount or=20 commission) on the Short-Term Notes confirmed and delivered to=20 them equal to .02% per annum of the principal amount due at=20 maturity.

In transactions where they are acting as principal, the Dealers=20 will purchase the Short-Term Notes from us at a discount from=20 the principal amount due at maturity. In these transactions,=20 their compensation will be equal to the difference between the=20 price at which they sell the Short-Term Notes and their purchase=20 price. Subject to certain limitations, Dealers may reallow a=20 portion of the discount they receive to other securities dealers or banks. With respect to non-underwritten sales, the Dealers’ compensation will take the form of a commission.

We do not intend to list Benchmark Bills or Short-Term Notes on=20 any exchange. There may be no established trading market for=20 Benchmark Bills and Short-Term Notes when issued. Dealers have=20 agreed to use their best efforts to facilitate secondary market=20 transactions in each issue of Benchmark Bills and Short-Term=20 Notes for which they were an applicable Dealer, but a secondary=20 market may not develop. If a secondary market develops, it may=20 not be very liquid. See “Risk Factors—Risks Related=20 to Market, Liquidity and Yield” in the Offering Circular.

Dealers may provide indicative pricing information to Bloomberg=20 L.P. or another information service designated by us for=20 Benchmark Bills and Short-Term Notes. Dealers will be solely=20 responsible for the indicative information so provided, which=20 may not reflect actual secondary market prices.

When Dealers purchase Benchmark Bills and Short-Term Notes as=20 principal for resale on a fixed price basis they may engage in=20 certain transactions that stabilize the price of the Benchmark=20 Bills and Short-Term Notes. Such transactions may consist of=20 bids or purchases for the purpose of pegging, fixing or=20 maintaining the price of the Benchmark Bills and Short-Term=20 Notes. Such transactions with respect to the Benchmark Bills and=20 Short-Term Notes may also include over-allotment transactions=20 and purchases to cover short positions created by the Dealers in=20 connection with an offering.

If the Dealers create a short position in the Benchmark Bills=20 and Short-Term Notes in connection with an offering, the Dealers=20 must reduce that short position by purchasing Debt Securities in=20 the open market. A short position is more likely to be created=20 if the Dealers are concerned that there may be downward pressure=20 in the price of the Benchmark Bills and Short-Term Notes in the=20 open market after pricing that could adversely affect investors=20 who purchase Benchmark Bills and Short-Term Notes in an=20 offering. In general, purchases of a security for the purpose of=20 stabilization or to reduce a short position could cause the=20 price of the security to be higher than it might be in the=20 absence of such purchases.

In connection with any particular issue of Benchmark Bills and=20 Short-Term Notes, we may enter into swaps, other hedging=20 transactions or reverse repurchase transactions with, or=20 arranged by, the applicable Dealer or an affiliate. The Dealer=20 or other parties may receive compensation, trading gain,=20 temporary funding or other benefits from these transactions. We=20 also may from time to time engage in other hedging activities or=20 reverse repurchase transactions that involve Benchmark Bills and=20 Short-Term Notes, in the open market or otherwise. We are not=20 required to engage in any of these transactions. If we commence=20 these transactions, we may discontinue them at any time.=20 Counterparties to these hedging activities may also engage in=20 market transactions involving Benchmark Bills and Short-Term=20 Notes.

Each Dealer who will sell 183 Day Notes has represented and=20 agreed that, except to the extent permitted by relevant United=20 States tax law, it has not offered or sold, and will not offer=20 or sell, the 183 Day Notes to a person who is within the United=20 States or its possessions or to a U.S. Person during the=20 “restricted period,” as defined in U.S. tax=20 regulations, and it has not delivered and will not deliver 183=20 Day Notes within the United States or its possessions in=20 connection with sales of the 183 Day Notes during such=20 restricted period. The Dealer will also represent that it has=20 and will continue to have in effect procedures reasonably=20 designed to ensure that its employees or agents who are directly=20 engaged in selling 183 Day Notes are aware that the 183 Day=20 Notes may not be offered or sold to a person who is within the=20 United States or its possessions or to a U.S. Person during the=20 restricted period, except as permitted by relevant United States=20 federal tax law. If the Dealer is a U.S. Person, it must represent that it is acquiring the 183 Day Notes for purposes of resale in connection with their original issuance and, if it retains any 183 Day Notes for its own account, it will do so only in accordance with the requirements of relevant United States federal tax law. Each Dealer has also represented and agreed that any affiliate that acquires the 183 Day Notes from it or another affiliate for purposes of offering or selling the 183 Day Notes during the restricted period will make the same representations.

The securities dealers and banks listed in the Offering Circular=20 under “Plan of Distribution-Dealers” also may act as=20 Short-Term Note Dealers under the Universal Debt Facility. Other=20 securities dealers and banks may be added from time to time in=20 connection with the distribution of Benchmark Bills and=20 Short-Term Notes or any particular issue of such securities.

See also “Plan of Distribution—Additional=20 Information” in the Offering Circular for further=20 information about the distribution of Debt Securities, including=20 Benchmark Bills and Short-Term Notes.

Fannie Mae expects to issue Subordinated Debt Securities in an amount such that, following a three-year phase-in period, the sum of our core capital, loss allowances and outstanding Subordinated Debt Securities will equal or exceed four percent of on-balance sheet assets, after setting aside capital sufficient to support off-balance sheet mortgage-backed securities. Set forth below is information about our Subordinated Benchmark Notes and other Subordinated Debt Securities. Except as set forth in this Appendix, the general description of Debt Securities set forth in this Offering Circular applies to Subordinated Debt Securities, which may have terms related to specified currencies, denominations, business day conventions, and clearance and settlement similar to other Debt Securities. This Appendix is hereby incorporated in and made a part of the Offering Circular.

The Pricing Supplement for any Debt Securities will indicate=20 which index, as described below, applies to the Debt Securities,=20 or may designate a different index, which will be described in=20 the Pricing Supplement.

Several sources for indices are pages or screens provided by=20 Bridge Telerate Information Services, Inc. (“Bridge=20 Telerate”) and Reuters Monitor Money Rates Service=20 (“Reuters”). If a page or screen, or its=20 provider, is replaced, the Calculation Agent will select the=20 appropriate successor page, screen or provider, if any.

If we specify LIBOR as the applicable interest rate index for=20 determining the interest rate for the related Debt Securities,=20 the following provisions will apply:


	(1) the rate that appears, at 11:00 a.m. (London=20 time) on the LIBOR Determination Date, on Telerate=20 Page 3750 for Deposits in the Index Currency having the=20 Index Maturity;

	(2) if a rate does not so appear, then LIBOR will be the rate that appears, at 11:00 a.m. (London time) on the LIBOR Determination Date, on Reuters ISDA page for Deposits in the Index Currency having the Index Maturity;

	(3) if a rate does not so appear, then the Calculation Agent will request the principal London offices of five leading banks in the London interbank market selected by the Calculation Agent (after consultation with Fannie Mae, if Fannie Mae is not then acting as Calculation Agent) to provide those banks’ offered quotations to prime banks in the London interbank market for Deposits in the Index Currency having the Index Maturity as of 11:00 a.m. (London time) on the LIBOR Determination Date and in a Representative Amount. If at least three quotations are provided, then LIBOR will be the arithmetic mean determined by the Calculation Agent of the quotations obtained (and, if five quotations are provided, eliminating the highest quotation (or in the event of equality, one of the highest) and the lowest quotation (or in the event of equality, one of the lowest));

	(4) if fewer than three quotations are so provided, then=20 the Calculation Agent will request five major banks in the=20 applicable Principal Financial Center selected by the=20 Calculation Agent (after consultation with Fannie Mae, if Fannie=20 Mae is not then acting as Calculation Agent) to provide those=20 banks’ offered quotations to leading European banks for=20 loans, commencing on the applicable Reset Date, in the Index=20 Currency having the Index Maturity as of approximately=20 11:00 a.m. (London time) in the applicable Principal=20 Financial Center on the LIBOR Determination Date and in a=20 Representative Amount. If at least three quotations are=20 provided, then LIBOR will be the arithmetic mean determined by=20 the Calculation Agent of the quotations obtained (and, if five=20 quotations are provided, eliminating the highest quotation (or=20 in the event of equality, one of the highest) and the lowest=20 quotation (or in the event of equality, one of the lowest)); and

	(5) if fewer than three quotations are so provided, then=20 LIBOR will be LIBOR determined for the immediately preceding=20 Reset Date. If the applicable Reset Date is the first Reset=20 Date, then LIBOR will be the rate for deposits in the Index=20 Currency having the Index Maturity that appeared, as of 11:00=20 a.m. (London time) on the most recent London Banking Day=20 preceding the LIBOR Determination Date for which the rate was displayed, on either Telerate Page 3750 or Reuters ISDA page with respect=20 to deposits commencing on the second London Banking Day=20 following that date (and, if the rate appears on both screens on=20 that London Banking Day, using Telerate Page 3750).

The following definitions apply only to the preceding=20 description of LIBOR (additional definitions on page D-3=20 also apply).


	•	“Reuters ISDA Page” means the display designated as=20 page “ISDA” on Reuters.

	•	“Telerate Page 3750” means the display designated=20 as “Page 3750” provided by Bridge Telerate.

	•	“LIBOR Determination Date” means the second London=20 Banking Day preceding the applicable Reset Date unless the Index=20 Currency is (i) Sterling, in which case it means the applicable=20 Reset Date or (ii) Euro, in which case it means the second=20 TARGET Business Day preceding the applicable Reset Date (unless=20 LIBOR is determined in accordance with paragraph (3) above, in=20 which case it means the applicable Reset Date).

	•	“London Banking Day” means any day on which commercial=20 banks are open for business (including dealings in foreign=20 exchange and deposits in the Index Currency) in London.

	•	“Index Currency” means the currency or currency unit=20 specified in the applicable Pricing Supplement with respect to=20 which LIBOR will be calculated. If we do not specify a currency=20 or currency unit in the applicable Pricing Supplement, the Index=20 Currency will be U.S. dollars.

	•	“Principal Financial Center” means the capital city of=20 the country issuing the Specified Payment Currency, or solely=20 with respect to the calculation of LIBOR, the Index Currency, as=20 the case may be, except that with respect to U.S. dollars,=20 Australian dollars, British pounds sterling, Canadian dollars,=20 Hong Kong dollars and Swiss francs, the Principal Financial=20 Center will be The City of New York, Sydney, London, Toronto,=20 Hong Kong and Zurich respectively, provided however, that with=20 respect to Euro, the Principal Financial Center will be=20 determined by the Calculation Agent (after consultation with=20 Fannie Mae).

	•	“Representative Amount” means a principal amount of=20 not less than U.S. $1,000,000 (or, if the Index Currency is=20 other than U.S. dollars, a principal amount not less than the=20 equivalent in the Index Currency).

If we specify EURIBOR as the applicable interest rate index for=20 determining the interest rate for the related Debt Securities,=20 the following provisions will apply:


	(1) the rate that appears at 11:00 a.m. (Brussels=20 time) on the EURIBOR Determination Date, on Telerate=20 Page 248 under the caption “EURIBOR” for Deposits=20 in Euro having the Index Maturity;

	(2) if a rate does not so appear, then the Calculation=20 Agent will request five major banks in the Euro-Zone selected by=20 the Calculation Agent (after consultation with Fannie Mae, if=20 Fannie Mae is not then acting as Calculation Agent) to provide=20 those banks’ offered quotations to prime banks in the=20 Euro-Zone interbank market for Deposits in Euro having the Index=20 Maturity as of 11:00 a.m. (Brussels time) on the EURIBOR=20 Determination Date and in a Representative Amount. If at least=20 three quotations are provided, then EURIBOR will be the=20 arithmetic mean determined by the Calculation Agent of the=20 quotations obtained (and, if five quotations are provided,=20 eliminating the highest quotation (or in the event of equality,=20 one of the highest) and the lowest quotation (or in the event of=20 equality, one of the lowest));

	(3) if fewer than three quotations are so provided, then=20 the Calculation Agent will request five major banks in the=20 Euro-Zone selected by the Calculation Agent (after consultation=20 with Fannie Mae, if Fannie Mae is not then acting as Calculation=20 Agent) to provide those banks’ offered quotations to=20 leading European banks for loans, commencing on the applicable=20 Reset Date, in Euro having the Index Maturity as of=20 approximately 11:00 a.m. (Brussels time) on the EURIBOR=20 Determination Date and in a Representative Amount. If at least=20 three quotations are provided, then EURIBOR will be the=20 arithmetic mean determined by the Calculation Agent of the=20 quotations obtained (and, if five quotations are provided,=20 eliminating the highest quotation (or in the event of equality,=20 one of the highest) and the lowest quotation (or in the event of=20 equality, one of the lowest)); and

	(4) if fewer than three quotations are so provided, then=20 EURIBOR will be EURIBOR determined for the immediately preceding=20 Reset Date. If the applicable Reset Date is the first Reset=20 Date, then EURIBOR will be the rate for deposits in Euro having=20 the Index Maturity that appeared, as of 11:00 a.m. (Brussels=20 time) on the most recent TARGET Business Day preceding the=20 EURIBOR Determination Date for which the rate was displayed, on=20 Telerate Page 248 under the caption “EURIBOR”=20 with respect to deposits commencing on the second TARGET=20 Business Day following that date.

The following definitions apply only to the preceding=20 description of EURIBOR.


	•	“EURIBOR Determination Date” means the second TARGET=20 Business Day preceding the applicable Reset Date, unless EURIBOR=20 is determined in accordance with paragraph (3) above, in=20 which case it means the applicable Reset Date.

	•	“Telerate Page 248” means the display designated=20 as “Page 248” provided by Bridge Telerate.

	•	“Euro-Zone” means the region consisting of member=20 states of the European Union that adopt the single currency in=20 accordance with the Treaty establishing the European Community,=20 as amended by the Treaty on European Union.


	•	“TARGET Business Day” means a day on which the=20 Trans-European Automated Real-time Gross Settlement Express=20 Transfer (“TARGET”) System is operating;

	•	“Representative Amount” means a principal amount of=20 not less than the equivalent of U.S. $1,000,000 in Euro;

	•	“Deposits” means deposits commencing on the applicable=20 Reset Date;

	•	“Index Maturity” means the maturity specified in the=20 applicable Pricing Supplement with respect to which LIBOR or=20 EURIBOR, as the case may be, will be calculated; and

	•	all rates will be obtained from sources expressed as a=20 percentage rate per annum.

If we specify Federal Funds Rate (Daily) as the applicable=20 interest rate index for determining the interest rate for the=20 related Debt Securities, the following provisions will apply:


	(1) the rate that appears, at 11:00 a.m. on the Reset=20 Date, on Telerate Page 120 under the caption “FED=20 FUNDS EFFECTIVE” and the column heading “EFF” for=20 the Business Day preceding the Reset Date;

	(2) if a rate does not so appear, then the Federal Funds=20 Rate (Daily) will be the rate that appears, at 11:00 a.m.=20 on the Reset Date, on Reuters NYAA Page for the Business=20 Day preceding the Reset Date;

	(3) if a rate does not so appear, the Calculation Agent=20 will request five leading brokers of federal funds transactions=20 in The City of New York selected by the Calculation Agent (after=20 consultation with Fannie Mae, if Fannie Mae is not then acting=20 as Calculation Agent) to provide a quotation of those=20 brokers’ effective rate for transactions in overnight=20 federal funds arranged by the broker settling on the Business=20 Day preceding the Reset Date. If at least three quotations are=20 provided, then the Federal Funds Rate (Daily) will be the=20 arithmetic mean determined by the Calculation Agent of the=20 quotations obtained (and, if five quotations are provided,=20 eliminating the highest quotation (or, in the event of equality,=20 one of the highest) and the lowest quotation (or in the event of=20 equality, one of the lowest));

	(4) if fewer than three quotations are so provided, then=20 the Calculation Agent will request five leading brokers of=20 federal funds transactions in The City of New York selected by=20 the Calculation Agent (after consultation with Fannie Mae, if=20 Fannie Mae is not then acting as Calculation Agent) to provide a=20 quotation of those brokers’ rate for the last transaction=20 in overnight federal funds arranged by the broker as of=20 11:00 a.m. on the Business Day preceding the Reset Date. If=20 at least three quotations are provided, then the Federal Funds=20 Rate (Daily) will be the arithmetic mean determined by the=20 Calculation Agent of the quotations obtained (and, if five=20 quotations are provided, eliminating the highest quotation (or,=20 in the event of equality, one of the highest) and the lowest=20 quotation (or in the event of equality, one of the lowest)); and

	(5) if fewer than three quotations are so provided, then=20 the Federal Funds Rate (Daily) will be the Federal Funds Rate=20 (Daily) determined for the immediately preceding Reset Date. If=20 the applicable Reset Date is the first Reset Date, then the=20 Federal Funds Rate (Daily) will be the daily federal funds rate=20 that appeared, at 11:00 a.m. on the most recent Business=20 Day preceding the Reset Date for which the rate was displayed,=20 on either Telerate Page 120 under the caption “FED=20 FUNDS EFFECTIVE” and the column heading “EFF” or=20 Reuters Screen NYAA Page (and, if the rate appears on both=20 screens on that Business Day, using Telerate Page 120).

If we specify Federal Funds Rate (Weekly Average) as the=20 applicable interest rate index for determining the interest rate=20 for the related Debt Securities, the following provisions will=20 apply:

The “Federal Funds Rate (Weekly Average)” means, with=20 respect to any Reset Date:

(1) the rate published in the latest H.15(519) available=20 at 11:00 a.m. on the Reset Date, opposite the caption=20 “Federal funds (effective)” and under the caption=20 “Week Ending” for the Friday immediately preceding the=20 Reset Date. (As described in the footnotes to the H.15(519), the=20 rate shown for the week ending on a Friday preceding a Reset=20 Date actually will be the rate for the week ending on (and=20 including) the Wednesday preceding the Reset Date (the=20 “Seven-Day Period”).);

(2) if a rate is not so published, then the Federal Funds=20 Rate (Weekly Average) will be the arithmetic mean determined by=20 the Calculation Agent of the rate, determined in the manner=20 described in subclauses (y) and (z) below (as=20 applicable), for each day in the Seven-Day Period (each a=20 “Day Rate”), provided that the Calculation Agent=20 determines a Day Rate for each day in the Seven-Day Period;


	(y) The Day Rate for a Business Day will be the rate that=20 appears, at 11:00 a.m. on the Reset Date, on Telerate=20 Page 120 under the caption “FED FUNDS EFFECTIVE”=20 and the column heading “EFF” for that Business Day. If=20 a rate for that Business Day does not appear on Telerate=20 Page 120 at 11:00 a.m. on the Reset Date, the=20 Calculation Agent will request five leading brokers of federal=20 funds transactions in The City of New York selected by the=20 Calculation Agent (after consultation with Fannie Mae, if Fannie=20 Mae is not then acting as Calculation Agent) to provide a=20 quotation of those brokers’ rate for the last transaction=20 in overnight federal funds arranged by the broker as of=20 11:00 a.m. on that Business Day. If at least three=20 quotations are provided, then the Day Rate will be the=20 arithmetic mean determined by the Calculation Agent of the=20 quotations obtained (and, if five quotations are provided,=20 eliminating the highest quotation (or, in the event of equality,=20 one of the highest) and the lowest quotation (or in the event of=20 equality, one of the lowest)); and

	(z) The Day Rate for a day other than a Business Day will=20 be the rate for the preceding Business Day, whether or not the=20 Business Day falls within the relevant Seven-Day Period,=20 determined in accordance with the provisions of subclause=20 (y) above; and

(3) if the Day Rate for each day in the Seven Day Period=20 is not so determined, then the Federal Funds Rate (Weekly=20 Average) will be the Federal Funds Rate (Weekly Average)=20 determined for the immediately preceding Reset Date. If the=20 applicable Reset Date is the first Reset Date, then the Federal=20 Funds Rate (Weekly Average) will be the rate published in the=20 latest H.15(519) available at 11:00 a.m. on the Reset Date,=20 opposite the caption “Federal funds (effective)” and=20 under the caption “Week Ending” for the Friday most=20 recently preceding the Reset Date.

Please note that the Federal Funds Rate (Weekly Average) as=20 published in the H.15(519) is a weekly average, while the=20 Federal Funds Rate (Weekly Average) as calculated under clause=20 (2) is based on an average of daily rates.


	•	“H.15(519)” means the official weekly statistical=20 release designated as the H.15(519), published by the Board of=20 Governors of the Federal Reserve System (the “Federal=20 Reserve Board”). We understand that the Federal Reserve=20 Board’s current method of official publication is by hard=20 copy release, although the Federal Reserve Board does provide=20 unofficial rates through its World Wide Web site and possibly=20 other means.

	•	“Reuters NYAA Page” means the display designated as=20 page “NYAA” on Reuters.

	•	“Telerate Page 120” means the display designated=20 as “Page 120” provided by Bridge Telerate.

	•	All times in the Federal Funds Rate descriptions refer to New=20 York City time.

If we specify Prime Rate as the applicable interest rate index=20 for determining the interest rate for the related Debt=20 Securities, the following provisions will apply:

(1) the arithmetic mean determined by the Calculation=20 Agent of the rates (after eliminating certain rates, as=20 described below in this clause (1)) that appear, at=20 11:00 a.m. on the Prime Rate Determination Date, on=20 Telerate Page 38 as the U.S. dollar prime rate or base lending=20 rate of each bank appearing thereon, provided that at least=20 three rates appear. In determining the arithmetic mean:


	•	if 20 or more rates appear, the highest five rates (or in the=20 event of equality, five of the highest) and the lowest five=20 rates (or in the event of equality, five of the lowest) will be=20 eliminated,

	•	if fewer than 20 but 10 or more rates appear, the highest two=20 rates (or in the event of equality, two of the highest) and the=20 lowest two rates (or in the event of equality, two of the=20 lowest) will be eliminated, or

	•	if fewer than 10 but five or more rates appear, the highest rate=20 (or in the event of equality, one of the highest) and the lowest=20 rate (or in the event of equality, one of the lowest) will be=20 eliminated;

(2) if fewer than three rates so appear, then the Prime=20 Rate will be the arithmetic mean determined by the Calculation=20 Agent of the rates (after eliminating certain rates, as=20 described below in this clause (2)) that appear, at=20 11:00 a.m. on the Prime Rate Determination Date, on Reuters=20 USPRIME 1 Page as the U.S. dollar prime rate or base=20 lending rate of each bank appearing thereon, provided that at=20 least three rates appear. In determining the arithmetic mean:


	•	if 20 or more rates appear, the highest five rates (or in the=20 event of equality, five of the highest) and the lowest five=20 rates (or in the event of equality, five of the lowest) will be=20 eliminated,

	•	if fewer than 20 but 10 or more rates appear, the highest two=20 rates (or in the event of equality, two of the highest) and the=20 lowest two rates (or in the event of equality, two of the=20 lowest) will be eliminated, or

	•	if fewer than 10 but five or more rates appear, the highest rate=20 (or in the event of equality, one of the highest) and the lowest=20 rate (or in the event of equality, one of the lowest) will be=20 eliminated;


	(3) if fewer than three rates so appear, then the=20 Calculation Agent will request five major banks in The City of=20 New York selected by the Calculation Agent (after consultation=20 with Fannie Mae, if Fannie Mae is not then acting as Calculation=20 Agent) to provide a quotation of those banks’ U.S. dollar=20 prime rate or base lending rate on the basis of the actual=20 number of days in the year divided by 360 as of the close of=20 business on the Prime Rate Determination Date. If at least three=20 quotations are provided, then the Prime Rate will be the=20 arithmetic mean determined by the Calculation Agent of the=20 quotations obtained (and, if five quotations are provided,=20 eliminating the highest quotation (or in the event of equality,=20 one of the highest) and the lowest quotation (or in the event of=20 equality, one of the lowest));

	(4) if fewer than three quotations are so provided, the=20 Calculation Agent will request five banks or trust companies=20 organized and doing business under the laws of the United States=20 or any state thereof, each having total equity capital of at=20 least U.S. $500,000,000 and being subject to supervision or=20 examination by federal or state authority, selected by the=20 Calculation Agent (after consultation with Fannie Mae, if Fannie=20 Mae is not then acting as Calculation Agent), to provide a=20 quotation of those banks’ or trust companies’ U.S.=20 dollar prime rate or base lending rate on the basis of the actual number of days in the year divided by 360 as of the close of business on the Prime Rate Determination Date.=20 (In making the selection of five banks or trust companies, the=20 Calculation Agent will include each bank, if any, that provided=20 a quotation as requested in clause (3) above and exclude=20 each bank that failed to provide a quotation as requested in=20 clause (3).) If at least three quotations are provided, then the=20 Prime Rate will be the arithmetic mean determined by the=20 Calculation Agent of the quotations obtained (and, if five=20 quotations are provided, eliminating the highest quotation (or=20 in the event of equality, one of the highest) and the lowest=20 quotation (or in the event of equality, one of the lowest)); and

	(5) if fewer than three quotations are so provided, then=20 the Prime Rate will be the Prime Rate determined for the=20 immediately preceding Reset Date. If the applicable Reset Date=20 is the first Reset Date, then the Prime Rate will be the rate=20 calculated pursuant to clause (1) or (2) for the most=20 recent New York Banking Day preceding the Reset Date for which=20 at least three rates appeared at 11:00 a.m. on either=20 Telerate Page 38 or Reuters USPRIME1 Page (and, if rates=20 appear on both screens on that New York Banking Day, using=20 Telerate Page 38).


	•	“New York Banking Day” means any day other than=20 (a) a Saturday, (b) a Sunday, (c) a day on which=20 banking institutions in The City of New York are required or=20 permitted by law or executive order to close or (d) a day=20 on which the Federal Reserve Bank of New York is closed.

	•	“Prime Rate Determination Date” means the New York=20 Banking Day preceding the applicable Reset Date.

	•	“Reuters USPRIME1 Page” means the display designated=20 as page “USPRIME1” on Reuters.

	•	“Telerate Page 38” means the display designated=20 as “Page 38” provided by Bridge Telerate.

	•	All times in the Prime Rate description refer to New York City=20 time.

If we specify Treasury Bill Rate as the applicable interest rate=20 index for determining the interest rate for the related Debt=20 Securities, the following provisions will apply:


	(1) the auction average rate for direct obligations of the=20 United States (“Treasury Bills”) having the Index=20 Maturity obtained from the most recent auction of Treasury Bills=20 prior to the Reset Date (the “Reference T-Bill=20 Auction”) as announced by the United States Department of=20 the Treasury in the form of a press release under the heading=20 “Investment Rate” by 3:00 p.m. on the Reset Date;

	(2) if the rate is not so announced, then the Treasury=20 Bill Rate will be the auction average rate for Treasury Bills=20 having the Index Maturity obtained from the Reference T-Bill=20 Auction as otherwise announced by the United States Department=20 of the Treasury by 3:00 p.m. on the Reset Date as determined by=20 the Calculation Agent;

	(3) if the rate is not so announced, the Calculation Agent=20 will request five leading primary United States government=20 securities dealers in The City of New York selected by the=20 Calculation Agent (after consultation with Fannie Mae, if Fannie=20 Mae is not then acting as Calculation Agent) to provide a=20 quotation of those dealers’ secondary market bid yield, as=20 of 3:00 p.m. on that Reset Date, for Treasury Bills with a=20 remaining maturity closest to the Index Maturity (or, in the=20 event that the remaining maturity is equally close, the longer=20 remaining maturity). If at least three quotations are provided, then the Treasury Bill Rate will be the arithmetic mean determined by the Calculation Agent of=20 the quotations obtained (and, if five quotations are provided,=20 eliminating the highest quotation (or, in the event of equality,=20 one of the highest) and the lowest quotation (or, in the event=20 of equality, one of the lowest)); and

	(4) if fewer than three quotations are so provided, the=20 Treasury Bill Rate will be the Treasury Bill Rate for the=20 immediately preceding Reset Date. If the applicable Reset Date=20 is the first Reset Date, the Treasury Bill Rate will be the=20 auction average rate for Treasury Bills having the Index=20 Maturity from the most recent auction of Treasury Bills prior to=20 the Reset Date for which the rate was announced by the United=20 States Department of the Treasury in the form of a press release=20 under the heading “Investment Rate”.

The auction average rate for Treasury Bills and the secondary=20 market bid yield for Treasury Bills will be obtained expressed=20 as a bond equivalent on the basis of a year of 365 or=20 366 days, as applicable (or, if not so expressed, will be=20 converted by the Calculation Agent to a bond equivalent yield).

If we specify CMT Rate (Weekly Average) as the applicable=20 interest rate index for determining the interest rate for the=20 related Debt Securities, the following provisions will apply:


	(1) the one-week average yield on 2-year United States=20 Treasury securities at “constant maturity” as=20 estimated from the United States Department of the=20 Treasury’s weekly yield curve, as published in the latest=20 H.15(519) (as defined below) available on the applicable CMT=20 Determination Date, provided that such H.15(519) was first=20 available not earlier than ten calendar days before such CMT=20 Determination Date, under the column “Week Ending” for=20 the week most recently ended opposite the heading “U.S.=20 government securities-Treasury Constant Maturities, 2-year.”

	(2) if the latest H.15(519) available on the applicable=20 CMT Determination Date was first available prior to ten calendar=20 days before such CMT Determination Date, the CMT Rate (Weekly=20 Average) will be such 2-year United States Treasury constant=20 maturity rate (or other 2-year United States Treasury rate) for=20 such CMT Determination Date as may then be published by either=20 the Board of Governors of the Federal Reserve System or the=20 United States Department of the Treasury that the Calculation=20 Agent determines to be comparable to the rate formerly published=20 in H.15(519).

	(3) if the CMT Rate (Weekly Average) as described in=20 clause (2) is not published by 10:00 a.m. (New York City=20 time) on the applicable CMT Determination Date, the CMT Rate=20 (Weekly Average) will be calculated by the Calculation Agent and=20 will be a yield to maturity (expressed as a bond equivalent and=20 as a decimal on the basis of a year of 365 or 366 days, as=20 applicable, and applied on a daily basis) based on the=20 arithmetic mean of the secondary market bid prices as of=20 approximately 3:30 p.m. (New York City time) on such CMT=20 Determination Date of three leading primary United States=20 government securities dealers in The City of New York selected=20 by the Calculation Agent (from five such dealers and eliminating=20 the highest quotation (or, in the event of equality, one of the=20 highest) and the lowest quotation (or, in the event of equality,=20 one of the lowest)) for direct noncallable fixed rate=20 obligations of the United States (“Treasury Notes”)=20 most recently issued with an original maturity of approximately=20 two years and a remaining term to maturity of not less than one=20 year. If three or four (and not five) of such dealers are=20 quoting as described in this clause (3), then the CMT Rate=20 (Weekly Average) will be based on the arithmetic mean of the bid=20 prices obtained and neither the highest nor lowest of such=20 quotations will be eliminated.


	(4) if fewer than three dealers selected by the=20 Calculation Agent are quoting as described in clause (3),=20 the CMT Rate (Weekly Average) will be calculated by the=20 Calculation Agent and will be a yield to maturity (expressed as=20 a bond equivalent and as a decimal on the basis of a year of 365=20 or 366 days, as applicable, and applied on a daily basis) based=20 on the arithmetic mean of the secondary market bid prices as of=20 approximately 3:30 p.m. (New York City time) on the applicable=20 CMT Determination Date of three leading primary United States=20 government securities dealers in The City of New York selected=20 by the Calculation Agent (from five such dealers and eliminating=20 the highest quotation (or, in the event of equality, one of the=20 highest) and the lowest quotation (or, in the event of equality,=20 one of the lowest)) for Treasury Notes with an original maturity=20 of approximately ten years and a remaining term to maturity=20 closest to two years. If three or four (and not five) of such=20 dealers are quoting as described in this clause (4), then the=20 CMT Rate (Weekly Average) will be based on the arithmetic mean=20 of the bid prices obtained and neither the highest nor lowest of=20 such quotations will be eliminated.

	(5) if fewer than three dealers selected by the Calculation=20 Agent are quoting as described in clause (4), the CMT Rate=20 (Weekly Average) will be the CMT Rate (Weekly Average)=20 determined on the immediately preceding CMT Determination Date.

In the case of clause (4), if two Treasury Notes with an=20 original maturity of approximately ten years have remaining=20 terms to maturity equally close to two years, the quotes for the=20 Treasury Note with the shorter remaining term to maturity will=20 be used.

“H.15(519)” means the official weekly statistical=20 release designated as the H.15(519), as published by the Board=20 of Governors of the Federal Reserve System (the “Federal=20 Reserve Board”). We understand that the Federal Reserve=20 Board’s method of official publication is by hard copy=20 release, although the Federal Reserve Board does provide=20 unofficial rates through its World Wide Web site and possibly=20 other means.

“CMT Determination Date” means the second Business Day=20 preceding the applicable Reset Date.

The Debt Securities may be offered or sold only where it is=20 legal to do so. The Dealers have represented and agreed that=20 they will comply with all applicable laws and regulations in=20 each jurisdiction in which they may purchase, offer, sell or=20 deliver Debt Securities or distribute this Offering Circular,=20 any Pricing Supplement or any other offering material. The=20 Dealers also have agreed to comply with selling restrictions=20 relating to specific countries. We and the Dealers may modify=20 selling restrictions at any time. Some of the restrictions that=20 may be applicable to the offer and sale of Debt Securities are=20 set forth below.

Each Dealer acknowledges that no document in relation to the=20 Debt Securities has been lodged with the Australian Securities=20 and Investments Commission. Each Dealer has represented and=20 agreed that it must not:


	(1)	offer a Debt Security for issue, or invite applications for the=20 issue of a Debt Security; and

	(2)	offer a Debt Security for sale, or invite offers to purchase a=20 Debt Security, to a person that receives the offer or invitation=20 in Australia unless:


	(i)	the offer or invitation, is an offer or invitation which does not need to be disclosed to investors under Chapter 6D of=20 the Corporations Law because section 708 of the=20 Corporations Law says otherwise; and


	(ii)	the offer or invitation, and all advertising and published=20 statements in relation to the offer or invitation, are each made=20 in compliance with the Corporations Law, the Corporations=20 Regulations and all other applicable laws and regulations.


	Corporations Law means the Corporations Law of any state or=20 territory of Australia;

	Corporations Regulations means the Corporations Regulations of=20 any state or territory of Australia; and

	Debt Security includes a legal or equitable right or interest=20 in, or an option to acquire, a Debt Security.

The Dealers have represented, warranted and agreed that the=20 Offering will not be a public offering in Belgium. The Offering=20 Circular may not be distributed to the public in Belgium and the=20 Debt Securities referred to herein may not be publicly offered=20 for sale in Belgium and no steps may be taken which would=20 constitute or result in a public offering in Belgium. Any=20 Subscription to the Debt Securities within Belgium should be=20 (i) for a minimum amount of BEF 10,000,000=20 (EUR 250,000) each or (ii) made in the name and for=20 the account of institutional Investors mentioned in article=20 3^o, 2 of the Royal Decree of 7 July 1999.

The Dealers acknowledge that the Debt Securities have not been=20 and will not be registered under the relevant laws of the=20 People’s Republic of China. Accordingly, the Dealers=20 represent, warrant and agree to and with Fannie Mae that they=20 have not made, and will not make, any offer, promotion,=20 solicitation for sales or sale of or for, as the case may be,=20 any Debt Securities in the People’s Republic of China,=20 except where permitted by the State Council of the People’s=20 Republic of China or where the activity otherwise is permitted=20 under the laws of the People’s Republic of China.

We and each Dealer have represented and agreed that the Debt=20 Securities are being issued outside of France, and that, in=20 connection with their initial distribution, we have not offered=20 or sold, and will not offer or sell Debt Securities in France,=20 and have not distributed and will not distribute or cause to be=20 distributed in France this Offering Circular or any other=20 offering material relating to the Debt Securities except=20 (1) to qualified investors (investisseurs=20 qualifiés) and/or (2) within a restricted circle=20 of investors (cercle restreint d’investisseurs), all=20 as defined in and in accordance with Article 6 of Ordinance=20 dated 28th September, 1967 (as amended) and Decree no. 98-880=20 dated 1st October, 1998.

In connection with the initial placement of the Debt Securities=20 in Germany, the Dealers have represented and agreed that they=20 will offer and sell Debt Securities (i) only for an=20 aggregate purchase price per purchaser of at least DM 80,000 (or=20 the foreign currency equivalent) or any other amount which may=20 be stipulated from time to time by applicable German law and=20 (ii) otherwise in accordance with the provisions of the=20 German Securities Prospectus Act of 13th December, 1990, as=20 amended, or any other laws applicable in Germany governing the=20 issue, offering and sale of securities.

The Dealers have represented and agreed that they have not,=20 directly or indirectly, offered or sold and will not, directly=20 or indirectly, offer or sell in Hong Kong, by means of any=20 document, any Debt Securities other than to persons whose=20 ordinary business it is to buy or sell shares or debentures,=20 whether as principal or agent, or in circumstances which do not=20 constitute an offer to the public within the meaning of the=20 Companies Ordinance (Cap. 32) of Hong Kong. The Dealers have=20 further represented and agreed that, unless they are persons who=20 are permitted to do so under the securities laws of Hong Kong,=20 they have not issued, or had in their possession for the purpose=20 of issuing, and they will not issue, or have in their possession=20 for the purposes of issuing, any advertisement, invitation or=20 document relating to the Debt Securities other than with respect=20 to Debt Securities intended to be disposed of to persons outside=20 Hong Kong or to persons in Hong Kong whose business involves the=20 acquisition, disposal or holding of securities, whether as=20 principal or as agent.

The Dealers have represented, warranted and agreed to and with=20 Fannie Mae that the Debt Securities will be issued outside Italy=20 and that such Dealer and its Affiliates have not offered or=20 sold, and will not offer or sell, directly or indirectly, any=20 Debt Securities to the public in Italy, and the Offering=20 Circular or any other offering material relating to such Debt=20 Securities will not be distributed or caused to be distributed=20 to the public in Italy. Each Dealer agrees that no offer, sale=20 or solicitation will be made in Italy without prior notification=20 to and clearance from the Bank of Italy or, if required, the=20 Italian Commission for Companies and Exchange.

The Dealers have represented and agreed that they will not offer=20 or sell any Debt Securities, directly or indirectly, in Japan or=20 to, or for the benefit of, any resident of Japan (which term as=20 used herein means any person resident in Japan, including any=20 corporation or other entity organized under the laws of Japan),=20 or to others for re-offering or resale, directly or indirectly,=20 in Japan or to a resident of Japan except in compliance with or=20 pursuant to an exemption from, the registration requirements of=20 the Securities and Exchange Law of Japan and in compliance with=20 any other applicable laws and regulations of Japan.

The Dealers have represented and agreed that they (i) have=20 not offered or sold, and will not offer or sell, Debt Securities=20 and (ii) have not distributed, and will not distribute,=20 this Offering Circular, in each case to any person or entity in=20 the Netherlands other than natural persons and/or legal entities=20 which trade or invest in securities in the course of their=20 profession or business (which includes banks, investment banks,=20 pension funds, insurance companies, securities firms, investment=20 institutions and other entities, including, without limitation,=20 treasuries and finance companies of large enterprises which=20 trade or invest in securities). The foregoing restrictions will=20 not apply to any offer or sale of Debt Securities in the=20 Netherlands in respect of which (i) the denomination is in=20 excess of Dutch Guilders 100,000 or the equivalent thereof in=20 other currencies or currency units, (ii) another exemption=20 specified in the Securities Transactions Supervision Act or any=20 of its implementing regulations applies and the requirements=20 applicable to that exemption are complied with or (iii) the=20 prohibition contained in Article 3 sub-section 1 of the=20 Securities Transactions Supervision Act does not apply.

The Dealers have represented, warranted and agreed to and with=20 Fannie Mae that they (i) have not offered or sold, and will=20 not offer or sell, directly or indirectly, any Debt Securities=20 and (ii) have not distributed and will not distribute,=20 directly or indirectly, any offering materials or advertisement=20 in relation to any offer of Debt Securities, in each case in New=20 Zealand other than (x) to persons whose principal business=20 is the investment of money or who, in the course of and for the=20 purposes of their business, habitually invest money or who in=20 all the circumstances can properly be regarded as having been=20 selected otherwise than as members of the public or (y) in=20 other circumstances where there is no contravention of the=20 Securities Act 1978 of New Zealand (or any statutory=20 modification or re-enactment of, or statutory substitution for,=20 the Securities Act 1978 of New Zealand).

The Dealers have represented and agreed that offers and sales,=20 direct or indirect, of Debt Securities have not been and will=20 not be made in Portugal except pursuant to an exemption from the=20 registration requirements of the Portuguese Stock Exchange Law=20 available thereunder, and in compliance with other relevant laws=20 of Portugal.

The Dealers have acknowledged that this Offering Circular has=20 not been registered as a prospectus with the Registrar of=20 Companies in Singapore. Accordingly, the Dealers have=20 represented and agreed that they have not offered or sold, and=20 will not offer or sell, any Debt Securities, nor will they=20 circulate or distribute this Offering Circular or any other=20 offering document or material relating to the Debt Securities,=20 directly or indirectly, to the public or any member of the=20 public in Singapore other than (i) to an institutional=20 investor or other person specified in Section 106C of the=20 Companies Act, Chapter 50 of Singapore, (ii) to a=20 sophisticated investor, and in accordance with the conditions, specified in Section 106D of the Companies Act or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the Companies Act.

The Dealers have acknowledged that this Offering Circular has=20 not been registered with the Comisión Nacional del=20 Mercado de Valores. Accordingly, the Dealers have=20 represented and agreed that this Offering Circular has not been=20 and will not be distributed in the Kingdom of Spain to any=20 person. The Dealers also have represented and agreed that they=20 have not offered or sold and will not offer or sell any Debt=20 Securities to the public in Spain, and have not made and will=20 not make any kind of advertisement of the Debt Securities to the=20 public in Spain, except according to Spanish regulations=20 regarding public offerings and issuance of securities=20 (Ofertas publicas de ventas y suscripciones de valores).=20 The Dealers also have acknowledged that the issuance of Debt=20 Securities denominated in Spanish pesetas by a non-Spanish=20 resident issuer requires prior notice to the Dirección=20 General del Tesoro y Política Financiera.

The Dealers have represented, warranted and agreed to and with=20 Fannie Mae that such Dealer and its Affiliates (i) have=20 not, directly or indirectly, offered or sold and will not,=20 directly or indirectly, offer or sell in Sweden any Debt=20 Securities by way of public offer, and (ii) have not=20 offered or sold and will not offer or sell any Debt Securities=20 to any investor in Sweden unless the minimum purchase by such=20 investor is to be at least Swedish kronor 300,000 in aggregate=20 principal amount of such Debt Securities, or the equivalent=20 thereof in another currency.

The Dealers have represented, warranted and agreed to and with=20 Fannie Mae that they have not, directly or indirectly, offered=20 or sold and will not, directly or indirectly, offer or sell in=20 Switzerland, by means of any document, any Swiss franc=20 denominated or Swiss franc related Debt Securities other than in=20 compliance with the guidelines of the Swiss National Bank=20 regarding the issue of Swiss franc denominated or Swiss franc=20 related debt securities; such guidelines currently require the=20 involvement of a bank domiciled in Switzerland that is regulated=20 under the Federal Act on Banks of 1934 (as amended) or a=20 securities dealer domiciled in Switzerland that is regulated=20 under the Swiss Stock Exchange Act of 1997, acting as lead=20 manager of the Swiss franc or Swiss franc related issue.

The Dealers have acknowledged that the Debt Securities have not=20 and will not be registered under the Securities and Exchange Law=20 of the Republic of China. Accordingly, the Dealers have=20 represented and agreed that they have not made, and will not=20 make, any offers, promotion, solicitation for sales and sales of=20 any Debt Securities in Taiwan.

(1) they have not offered or sold Debt Securities that=20 have an original maturity of one year or more and, prior to six=20 months after the issue date of the Debt Securities, will not=20 offer or sell any Debt Securities having an original maturity of=20 one year or more to persons in the United Kingdom except to=20 persons whose ordinary activities involve them in acquiring,=20 holding, managing or disposing of investments (as principal or=20 agent) for the purposes of their businesses or otherwise in=20 circumstances which have not resulted and will not result in an=20 offer to the public in the United Kingdom within the meaning of=20 the Public Offers of Securities Regulations 1995 (as amended),


	(2) they have complied and will comply with all applicable=20 provisions of the Financial Services Act 1986 with respect to=20 anything done by them in relation to the Debt Securities in,=20 from or otherwise involving the United Kingdom, and

	(3) they have only issued or passed on and will only issue=20 or pass on in the United Kingdom any document received by them=20 in connection with an issue of Debt Securities to a person who=20 is of a kind described in Article 11(3) of the Financial=20 Services Act 1986 (Investment Advertisements) (Exemptions) Order=20 1996 (as amended) or is a person to whom the document may=20 otherwise lawfully be issued or passed on.

Please see “Distribution of Benchmark Bills and Short-Term Notes—183 Day Notes Selling Restriction” in Appendix B to the Offering Circular for the selling restriction that applies to 183 Day Notes and=20 “Targeted Registered Debt Securities—Selling=20 Restrictions” in Appendix G to the Offering Circular=20 for the selling restrictions that apply to Targeted Registered=20 Securities.

The following provisions govern redenomination to the Euro of=20 Debt Securities originally denominated in currencies expected to=20 be replaced by the Euro, the new currency of the European=20 economic and monetary union.


	•	“cent” means the sub-unit of the Euro (which is equal=20 to 1/100 of a Euro).

	•	“Euro(s)” means the currency introduced at the start=20 of the third stage of European economic and monetary union=20 pursuant to the Treaty.

	•	“Fixed Conversion Rate” means the fixed rate for the=20 conversion of the Specified Payment Currency into Euro=20 established by the Treaty. The Fixed Conversion Rates are:


	•	“Original Specified Payment Currency” means the original national currency unit of a Participating Member State in which a Debt Security is denominated and payable.

	•	“Participating Member State” means a member state of=20 the European Union that adopts the Euro as its single currency=20 in accordance with the Treaty.

	•	“Redenomination Notice” means the notice we will give=20 to Holders and the applicable clearing system of our intention=20 to redenominate an Original Specified Payment Currency to Euro.

	•	“Selected Redenomination Date” means the Interest=20 Payment Date that is specified in a Redenomination Notice as the=20 date on which redenomination of Debt Securities will occur.

	•	“Treaty” means the Treaty establishing the European=20 Community, as amended by the Treaty on European Union and as=20 amended by the Treaty of Amsterdam.

During the third stage of European economic and monetary union,=20 which commenced on January 1, 1999, and runs through=20 December 31, 2001, the Euro is a currency in its own right.=20 During this stage:


	•	one Euro, in addition to being divided into 100 cents, is=20 divided into the national currency unit of each Participating=20 Member State according to the relevant Fixed Conversion Rate; and

	•	banknotes and coins denominated in the national currency unit of=20 a Participating Member State continue to have legal tender=20 status in the Participating Member State.

Once Euro banknotes and coins are issued at the end of the=20 transitional period, they will have legal tender status in all=20 Participating Member States, and the national currency units of=20 the Participating Member States will cease to exist. References to those 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.

With respect to any Debt Security originally denominated in an=20 Original Specified Payment Currency, on the Selected=20 Redenomination Date, we may change the currency unit in which=20 these applicable Debt Securities (the “Applicable Debt=20 Securities”) are denominated and payable from the Original=20 Specified Payment Currency to the Euro. In order to change the=20 currency unit, we must give the Holders of the Applicable Debt=20 Securities and the applicable clearing system at least=20 30 days’ prior notice by sending the Redenomination=20 Notice. We also will notify the Global Agent in writing of our=20 intention to change the currency unit at least 45 days=20 prior to the Selected Redenomination Date. We may change the=20 currency unit, however, without the consent of the Holders or=20 beneficial owners of the Applicable Debt Securities, the Global=20 Agent, or the applicable clearing system.

The Redenomination Notice given by us will state the Selected=20 Redenomination Date and describe the manner in which the=20 redenomination will be effected. The Redenomination Notice also=20 will describe the rounding convention to be used by us when=20 redenominating the Applicable Debt Securities and the effect of=20 that rounding convention. See “Description of the Debt=20 Securities—Notices” for certain other general=20 provisions regarding notices to Holders of Debt Securities.

If we elect to redenominate an issue of Applicable Debt=20 Securities into Euro, we will redenominate all, not just a part,=20 of the outstanding issue of Applicable Debt Securities. We will=20 effect redenomination by converting the aggregate outstanding=20 principal amount of the Applicable Debt Securities, as stated in=20 the Original Specified Payment Currency, into Euro by using the=20 Fixed Conversion Rate and by rounding in compliance with rules=20 regarding rounding set forth in applicable European Community=20 regulations. However, if we determine, in consultation with the=20 Global Agent, that the manner of the redenomination and/or=20 rounding is not consistent with existing or anticipated market=20 practice for the redenomination into Euro of debt obligations=20 issued in the euromarket (regardless of the original currency in=20 which the debt obligations were denominated) and held in any=20 international clearing system, or is not practicable given the=20 manner in which the Applicable Debt Securities are held and=20 cleared through the applicable clearing system, we may, in=20 consultation with the Global Agent, adopt another method which=20 is, or we reasonably believe will be, so consistent or=20 practicable.

Immediately after redenomination on the Selected Redenomination=20 Date, Euro will be deemed the new Specified Payment Currency in=20 which we will make payments of any amounts on the Applicable=20 Debt Securities after the Selected Redenomination Date. On the=20 Selected Redenomination Date, however, we may pay any interest=20 or principal then due on the Debt Securities either in the=20 Original Specified Payment Currency or in Euro, as we may decide=20 in our sole discretion and as we will describe in the=20 Redenomination Notice.

In the event that we do not redenominate Debt Securities=20 denominated in an Original Specified Payment Currency prior to=20 the end of the transitional period, the Treaty provides that=20 references in the Debt Securities to the Original Specified=20 Payment Currency will be deemed references to the Euro unit,=20 according to the relevant Fixed Conversion Rate. The=20 Redenomination Date may be after the end of the transitional=20 period.

In connection with the redenomination that occurs on the=20 Selected Redenomination Date, we may determine, in consultation=20 with the Global Agent, that additional changes to the terms of=20 the Applicable Debt Securities are advisable in order to conform=20 the Applicable Debt Securities to conventions then applicable to=20 the issue or trading of instruments denominated or payable in=20 Euro (“Additional Conforming Changes”). The Additional=20 Conforming Changes may include changes to Minimum Denominations=20 and Additional Increments of the Applicable Debt Securities,=20 accrual methods, the definition of “Business Day”,=20 and/or certain other terms of the Applicable Debt Securities. We=20 may amend and/or replace any related Applicable Debt Securities,=20 definitive Debt Securities, and/or the Global Agency Agreement in order to reflect the changes described in the Redenomination Notice and all Additional Conforming Changes.

Any Additional Conforming Changes will not take effect until we=20 have given at least 30 days prior notice to the Holders of=20 the Applicable Debt Securities and the applicable clearing=20 system and at least 45 days prior notice to the Global=20 Agent (unless we and the Global Agent mutually agree to a=20 shorter time for notice to the Global Agent).

Notwithstanding any provisions contained in this Offering=20 Circular under “Description of the Debt Securities— Modification and Amendment”, we will be able to take all of=20 the actions described in and contemplated by this section=20 without the consent of any Holders or beneficial owners of the=20 Applicable Debt Securities.

There is a discussion of the tax consequences of redenominating=20 a Debt Security to Euro in this Offering Circular under=20 “United States Taxation—U.S. Persons—Debt=20 Securities with Payments Based on a Non-U.S. Currency— Conversion to the Euro.”

This Appendix is incorporated in and made a part of the Offering=20 Circular. Except as set forth in this Appendix, the general=20 description of Debt Securities set forth in the Offering=20 Circular (and, if applicable, Appendix B) applies to=20 Targeted Registered Securities.

Certain issues of Debt Securities (“Targeted Registered=20 Securities”) may be “targeted to foreign markets”=20 under U.S. tax regulations. These regulations generally do not=20 allow Targeted Registered Securities, in connection with their=20 original issuance, to be offered or sold to persons who are=20 within the United States or its territories or possessions or to=20 or for the account of U.S. Persons (as defined under=20 “United States Taxation—U.S. Persons—In=20 General”). Such regulations also require Holders, and in=20 certain cases beneficial owners, of Targeted Registered=20 Securities to comply with certain periodic certification=20 requirements, including certification of non-U.S. beneficial=20 ownership. In addition, these regulations generally prohibit the=20 delivery of Debt Securities representing Targeted Registered=20 Securities within the United States or its territories or=20 possessions. Only the Dealers named in the Offering Circular=20 (and those Dealers identified in an applicable Pricing=20 Supplement to the Offering Circular relating to Targeted=20 Registered Securities (the “Targeted Registered=20 Supplement”) that have represented and warranted as to=20 those matters summarized below and certain other matters) may=20 offer or sell Targeted Registered Securities.

If we issue Targeted Registered Securities, special provisions=20 applicable to such Targeted Registered Securities, including=20 form, selling and transfer restrictions and tax considerations=20 and certifications, will be described in the Targeted Registered=20 Supplement and, in certain cases, any applicable Pricing=20 Supplement. The combined offering document (as defined in the=20 Targeted Registered Supplement) generally may not be distributed=20 in the United States or to U.S. Persons. Targeted Registered=20 Securities will only be issued as Global Book-Entry Securities.

No Dealer participating in the distribution of Targeted Registered Securities (whether as principal or agent) may allow=20 any person (including an affiliate) to participate in the=20 distribution of Targeted Registered Securities without our prior=20 written consent and such person having entered into an agreement=20 with us.

If we issue Targeted Registered Securities, the Targeted=20 Registered Supplement will describe the selling restrictions=20 that apply to the Targeted Registered Securities. Each Dealer=20 named in the Offering Circular has represented and agreed, and=20 each Dealer identified in the Targeted Registered Supplement=20 will have represented and agreed, as follows:


	(1) that each Dealer will not offer or sell Targeted=20 Registered Securities during a “restricted period,” as=20 defined in U.S. tax regulations, to persons who are within the=20 United States or its territories or possessions (with certain=20 exceptions) or to or for the account of U.S. Persons (with=20 certain exceptions) and

	(2) that each Dealer has in effect procedures reasonably=20 designed to ensure that its employees and agents who will be=20 directly engaged in offering or selling the Targeted Registered=20 Securities are aware of these selling restrictions.

You also should review the selling restrictions set forth in Appendix E to the Offering Circular.

Each term listed below is defined or explained in the Offering Circular or one of its Appendices on the page indicated.


	Initial = Public			Proceeds = to
	Offering = Price(1)		Dealer = Discount	Fannie = Mae(1)(2)

Per Note		99.684%			.400%	99.284%




Total		$1,495,260,000			$6,000,000	$1,489,260,000


Issuer		Fannie Mae

Securities Offered		$1,500,000,000 of 6.25% Subordinated Notes due February 1, 2011

Rating		The Notes are expected to be rated “Aa2” by Moody’s Investors Service, Inc. and “AA-” by Standard & Poor’s Ratings Group, a Division of the McGraw-Hill Companies.

Additional Subordinated Debt Securities		We presently intend to issue additional subordinated Debt Securities in an amount such that, following a three-year phase-in period, the sum of our core capital, loss allowances and outstanding subordinated Debt Securities will equal or exceed four percent of on-balance sheet assets, after setting aside capital sufficient to support off-balance sheet mortgage-backed securities. We refer to the Notes and any other Debt Securities with similar subordination and interest deferral provisions as “Subordinated Debt Securities.”

Status; Subordination		The Notes will be unsecured subordinated obligations of Fannie Mae issued under Section 304(e) of the Charter Act. The Subordinated Debt Securities will rank junior in priority of payment to our “Senior Liabilities”. “Senior Liabilities” means all existing and future liabilities of Fannie Mae, other than liabilities that by their terms expressly rank equal with or junior to Subordinated Debt Securities. Senior Liabilities include, but are not limited to, debt obligations issued under Section 304(b) of the Charter Act, liabilities in respect of our guarantees on mortgage-backed securities and Fannie Mae’s 9% Subordinated Capital Debentures due 2019 and Zero Coupon Subordinated Capital Debentures due 2019 (together, the “Outstanding Capital Debentures”). At December 31, 2000, we had outstanding total liabilities of $654,234 million, all of which constitute Senior Liabilities. Senior Liabilities also include any liabilities related to the $706,684 million of mortgage-backed securities outstanding at that date on which Fannie Mae guarantees timely payment of principal and interest. This excludes $351,066 million of mortgage-backed securities held = by us in portfolio at that date.

Redemption		The Notes will not be subject to redemption by us prior to maturity.

Interest		The Notes will accrue interest from February 1, 2001 at a rate of 6.25% per annum. Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months. Interest will be paid semi-annually in arrears on each February 1 and August 1, commencing August 1, 2001.

Deferral of Interest		We will defer the payment of interest on the Notes and on all other outstanding Subordinated Debt Securities if, as of the fifth Business Day prior to an Interest Payment Date on the Notes or on any other Subordinated Debt Securities (each, a “Deferral Determination Date”):

		• our “core capital” is below 125% of our=20 “critical capital” requirement,

		or

		• (1) our “core capital” is below our=20 “minimum capital” requirement and (2) the=20 U.S. Secretary of the Treasury, acting on our request, exercises his or her discretionary authority pursuant to=20 Section 304(c) of the Charter Act to purchase our debt=20 obligations.

		Based on the most recent Office of Federal Housing Enterprise=20 Oversight (“OFHEO”) announcement regarding our core=20 capital and minimum capital levels, at September 30, 2000,=20 Fannie Mae had core capital of $19,870 million or 200.3% of=20 our critical capital requirement of $9,918 million and=20 $489 million above our minimum capital requirement of=20 $19,381 million as of that date.

		We may not defer interest on the Notes for more than five=20 consecutive years or beyond their Maturity Date.

Accrual of Interest on Deferral Amounts		If we defer the payment of interest on the Notes, interest will=20 continue to accrue on the Notes and compound at a rate of 6.25%=20 per annum.

Resumption of Interest Payments		We will pay all deferred interest, and interest thereon, on the=20 Notes and all other Subordinated Debt Securities as soon as,=20 after giving effect to such payments, we no longer would be=20 required to defer interest under the terms described above, and=20 we have repaid all debt obligations, if any, purchased by the=20 U.S. Secretary of the Treasury. We will make this payment in=20 respect of the Notes and all other Subordinated Debt Securities=20 on the next scheduled Interest Payment Date that occurs in respect of the Notes or any other Subordinated Debt Securities,=20 unless we elect to make the payment earlier.

No Dividends during Deferral Periods		During periods when we defer the payment of interest on the Notes, we may not declare or pay dividends on, or redeem, purchase or acquire, our common stock or our preferred stock.

No Acceleration Right		The Notes will not contain any provisions permitting the Holders=20 to accelerate the maturity thereof on the occurrence of any=20 default or other event.

Tax Status		The Notes will constitute debt for U.S. federal income tax=20 purposes. The Notes and payments on the Notes generally will be=20 subject to taxation by the United States and generally are not exempt from taxation by other U.S. or non-U.S. taxing=20 jurisdictions. Non-U.S. Persons generally will be subject to=20 U.S. income and withholding tax unless they provide required=20 certifications or statements.

Form		The Notes will be issued as Fed Book-Entry Securities.

Denominations		We will issue the Notes in minimum denominations of U.S.$1,000=20 and additional increments of U.S.$1,000.

Listing		Application has been made to list the Notes on the Luxembourg=20 Stock Exchange.

Notices		We will give prompt notice of any event that would require=20 deferral of the payment of interest on the Notes. We will also=20 give notice of the resumption of the payment of interest on the=20 Notes. See “Description of the Notes—Notices”.

Eligibility for Stripping		The Notes are not eligible to be separated or=20 “stripped” into their separate interest components and=20 principal components.

Identification Numbers:		CUSIP: 31359MGT4 ISIN: US31359MGT45 Common Code: 12404727



	September 30,		December 31,

	2000		1999	1999		1998	1997		1996	1995

Core Capital	$	19,870		$	17,222		$	17,876		$	15,465		$	13,793		$	12,773		$	10,959




Required Critical Capital		9,918			8,764			9,127			7,863			6,528			5,890			5,373




Core Capital as a Percentage of Required Critical Capital		200.34	%		196.51	%		195.86	%		196.68	%		211.29	%		216.86	%		203.96	%




Required Minimum Capital	$	19,381		$	17,100		$	17,770		$	15,334		$	12,703		$	11,466		$	10,451


Dealer		Principal Amount

Goldman, Sachs & Co.		$	430,000,000




Morgan Stanley & Co. Incorporated			430,000,000




Salomon Smith Barney Inc.			430,000,000




Bear, Stearns & Co. Inc.			35,000,000




Blaylock & Partners, L.P.			35,000,000




Credit Suisse First Boston Corporation			35,000,000




Lehman Brothers Inc.			35,000,000




Merrill Lynch, Pierce, Fenner & Smith Incorporated			35,000,000




J.P. Morgan Securities Inc.			35,000,000

	Total		$	1,500,000,000


• Benchmark Bills^SM			• Benchmark Bonds^SM

• Benchmark Notes®			• Callable Benchmark = Notes^SM


(1)	Plus accrued interest, if any, from=20 February 1, 2001.

(2)	Before deducting estimated expenses of=20 $250,000.


Goldman, Sachs & = Co.	Morgan Stanley Dean = Witter	Salomon Smith = Barney


	Page

Summary		3




Risk Factors		7




Description of the Debt Securities		12




Clearance and Settlement		32




United States Taxation		34




Plan of Distribution		46




Validity of the Debt Securities		49




General Information		49




Fannie Mae		50




Use of Proceeds		50




Selected Financial Information		51




Capitalization		53




Additional Information About Fannie Mae		54




Appendix A: Benchmark Securities		A-1




Appendix B: Benchmark Bills and Short-Term = Notes		B-1




Appendix C: Subordinated Benchmark Notes and Other=20 Subordinated Debt Securities		C-1




Appendix D: Index Descriptions		D-1




Appendix E: Selling Restrictions		E-1




Appendix F: Redenomination to the Euro		F-1




Appendix G: Targeted Registered Debt Securities		G-1




Appendix H: Location of Defined Terms*		H-1


*	We use capitalized terms in this Offering Circular. See=20 Appendix H for the page locations of the definitions of the principal capitalized terms.


Issuer		Fannie Mae

Debt Securities Offered:

Benchmark Securities		We plan to issue Benchmark Securities, which are U.S. dollar=20 denominated, regularly scheduled issues in large principal=20 amounts, in the form of Benchmark Bills, Benchmark Notes,=20 Callable Benchmark Notes, Benchmark Bonds and Subordinated=20 Benchmark Notes. Issuances may consist of new issues of=20 Benchmark Securities or the “reopening” of an existing=20 issue.

Other Debt Securities		We plan to issue other Debt Securities from time to time=20 denominated in U.S. dollars or other currencies with maturities=20 of one day or longer. We will issue these Debt Securities as=20 Short-Term Notes, Notes or Bonds.

Pricing Supplement		We will describe in a Pricing Supplement specific terms, pricing=20 information and other information for each issue of Debt=20 Securities other than Benchmark Bills or Short-Term Notes.

Amount		We may issue an unlimited amount of Debt Securities.

Specified Currencies		Debt Securities may be denominated in, and principal and interest on Debt Securities may be paid in, U.S. dollars and=20 other currencies or currency units that we determine. Government=20 or monetary authorities may require that debt securities=20 denominated in certain currencies or currency units have certain=20 denominations or have minimum or maximum maturities.

Denomination		We will issue U.S. dollar denominated Debt Securities in minimum=20 denominations of U.S. $1,000 and additional increments of U.S. $1,000. We will issue non-U.S. dollar denominated Short-Term Notes in the denominations listed in Appendix B.=20 The applicable Pricing Supplement will indicate the=20 denominations for other non-U.S. dollar denominated Debt=20 Securities.

Principal Amount		The principal amount payable at maturity may be a fixed amount,=20 which may be par or a specified amount above or below par. The=20 principal amount payable at maturity also may be a variable=20 amount determined by reference to one or more indices, such as=20 interest or exchange rate indices, or other formulas. The=20 principal may be amortized through periodic payments during the=20 term of the Debt Securities.

Interest		Debt Securities may bear interest at fixed or variable rates (or=20 a combination of fixed and variable rates), or may bear interest=20 that is indexed by reference to an interest or currency exchange=20 rate or in some other manner, or may not bear interest.

Offering Price		Debt Securities will be offered at fixed prices equal to par, or=20 a discount to or premium over par, or at varying prices relating to prevailing market prices at the time of resale as determined=20 by the applicable Dealer.

No Acceleration Rights		The Debt Securities will not contain any provisions permitting=20 the Holders to accelerate the maturity of the Debt Securities if=20 a default or other event occurs.

Form		We will issue Debt Securities in book-entry form either through=20 the U.S. Federal Reserve Banks or through another depository.=20 Except in the limited circumstances described in this Offering=20 Circular, we will not issue Debt Securities in definitive form.

Eligibility for Stripping		The Pricing Supplement will indicate whether Fed Book-Entry=20 Securities will be eligible to be separated=20 (“stripped”) into their separate interest and principal components on the book–entry records of the=20 Federal Reserve Bank of New York.

Status		The Debt Securities will be unsecured general obligations of=20 Fannie Mae issued under Section 304(b) of the Charter Act or=20 unsecured subordinated obligations of Fannie Mae issued under=20 Section 304(e) of the Charter Act. The Debt Securities,=20 together with interest thereon, are not guaranteed by the United=20 States and do not constitute a debt or obligation of the United=20 States or of any agency or instrumentality thereof other than=20 Fannie Mae.

Redemption		The Pricing Supplement for a particular issue of Debt Securities=20 will specify whether the Debt Securities are subject to=20 mandatory or optional redemption, in whole or in part, prior to=20 maturity and, if redeemable, will describe terms applicable to=20 the redemption. Benchmark Bills and Short-Term Notes will not be=20 redeemable prior to maturity.

Governing Law		Fed Book-Entry Securities (including rights and obligations) will be governed by, and construed in accordance with, regulations adopted by the U.S. Department of Housing and Urban Development or any other U.S. governmental body or agency that are applicable to the Fed Book-Entry Securities, and, to the extent that these regulations do not apply, the laws of the State of New York, U.S.A. Global Book-Entry Securities will be governed by, and construed in accordance with, the laws of the State of New York, U.S.A.

Tax Status		The Debt Securities and payments thereon generally are subject=20 to taxation by the United States and generally are not exempt=20 from taxation by other U.S. or non-U.S. taxing jurisdictions.=20 Non-U.S. Persons generally will be subject to U.S. income and=20 withholding tax unless they provide required certifications or=20 statements.

Listing		The Pricing Supplement relating to each issue of Debt Securities=20 will indicate the exchange, if any, on which we will list the=20 Debt Securities. We have made an application for certain Debt=20 Securities issued under this Universal Debt Facility to be=20 listed on the Luxembourg Stock Exchange. The current minimum=20 maturity for Debt Securities listed on the Luxembourg Stock=20 Exchange is seven days. We also may issue unlisted Debt=20 Securities, and Debt Securities listed on other or additional=20 exchanges. We do not intend to list Benchmark Bills or=20 Short-Term Notes on any exchange.


Clearance and Settlement		Depending on the terms of an issue of Debt Securities and where=20 those Debt Securities are to be offered, Debt Securities may=20 clear and settle through one or more of the following:

		• the U.S. Federal Reserve Banks

		• DTC

		• Euroclear

		• Clearstream

		• other designated clearing systems

		We expect most issues of Debt Securities denominated and payable=20 in U.S. dollars, including all Benchmark Securities, to clear=20 and settle through the Fed Book-Entry System. These Debt=20 Securities generally may be held indirectly through other=20 clearing systems, such as the systems operated by Euroclear and=20 Clearstream.

		We expect issues of Debt Securities denominated or payable in a=20 Specified Currency other than U.S. dollars (and Debt Securities=20 denominated and payable in U.S. dollars not cleared and settled=20 through the Fed Book-Entry System) to clear and settle through=20 the systems operated by DTC, and indirectly through Euroclear=20 and Clearstream. We expect issues of Debt Securities distributed=20 solely outside of the United States to clear and settle through=20 the systems operated by Euroclear, Clearstream or other=20 designated clearing systems and, in some cases, DTC, irrespective of the Specified Currency in which the Debt Securities are denominated or payable.


Fiscal Agents		The Federal Reserve Bank of New York will act as fiscal agent=20 for Benchmark Bills and for Short-Term Notes that are Fed=20 Book-Entry Securities. The U.S. Federal Reserve Banks will act=20 as fiscal agent for other Fed Book-Entry Securities.

Global Agent		The Chase Manhattan Bank will act as global agent for Global=20 Book-Entry Securities.


Dealers		The current Dealers under this Universal Debt Facility are named=20 under “Plan of Distribution—Dealers.” We may add=20 other securities dealers or banks from time to time in=20 connection with the distribution of the Debt Securities or a=20 particular issue of Debt Securities.

Method of Distribution		We generally will sell Debt Securities to Dealers acting as=20 principal, whether individually or in a syndicate, for resale to=20 investors either at a fixed price or at varying prices=20 determined by the Dealers. Alternatively, Debt Securities may be=20 sold through Dealers on a non-underwritten basis, or may be sold=20 by us directly to investors.

Selling Restrictions		Restrictions exist in certain jurisdictions on the Dealers’=20 offer, sale and delivery of Debt Securities and the distribution=20 of offering materials relating to the Debt Securities.

Secondary Market Information		Dealers have agreed to provide, for Benchmark Securities,=20 indicative pricing information for posting on a designated=20 screen page.



		Year = Ended December 31,

		2000		1999		1998		1997		1996

Income Statement Data




	Interest income		$	42,781			$	35,495			$	29,995			$	26,378			$	23,772




	Interest expense			(37,107	)			(30,601	)			(25,885	)			(22,429	)			(20,180	)

	Net interest income			5,674				4,894				4,110				3,949				3,592




	Guaranty fees			1,351				1,282				1,229				1,274				1,196




	Fee and other income (expense), net			(44	)			191				275				125				86




	Credit-related expenses			(94	)			(127	)			(261	)			(375	)			(409	)




	Administrative expenses			(905	)			(800	)			(708	)			(636	)			(560	)

	Income before federal income taxes and extraordinary item			5,982				5,440				4,645				4,337				3,905




	Provision for federal income taxes			(1,566	)			(1,519	)			(1,201	)			(1,269	)			(1,151	)

	Income before extraordinary item			4,416				3,921				3,444				3,068				2,754




	Extraordinary item —gain (loss) net of tax = effect			32				(9	)			(26	)			(12	)			(29	)

	Net income		$	4,448			$	3,912			$	3,418			$	3,056			$	2,725

	Preferred stock dividends			(121	)			(78	)			(66	)			(65	)			(42	)

	Net income available to common shareholders		$	4,327			$	3,834			$	3,352			$	2,991			$	2,683

	Basic earnings per common share(1):




		Earnings before extraordinary item		$	4.28			$	3.75			$	3.28			$	2.87			$	2.53




		Extraordinary item			.03				—				(.02	)			(.02	)			(.03	)

		Net earnings		$	4.31			$	3.75			$	3.26			$	2.85			$	2.50

	Diluted earnings per common share(1):




		Earnings before extraordinary item		$	4.26			$	3.73			$	3.26			$	2.84			$	2.51




		Extraordinary item			.03				(.01	)			(.03	)			(.01	)			(.03	)

		Net earnings		$	4.29			$	3.72			$	3.23			$	2.83			$	2.48

	Cash dividends per common share:		$	1.12			$	1.08			$	.96			$	.84			$	.76


(1)	Earnings per common share amounts in 1996 have been restated to comply with Financial Accounting Standard=20 No. 128, Earnings per Share.
(2)	Stockholders’ equity plus general allowance for losses.
(3)	Includes revenues net of operating losses plus=20 taxable-equivalent adjustments for tax-exempt income and=20 investment tax credits using the applicable federal income tax=20 rate.
(4)	“Earnings” consists of (a) income=20 before federal income taxes and extraordinary item and=20 (b) fixed charges. “Fixed charges” represents=20 interest expense.
(5)	Includes MBS in portfolio of $351 billion, $282 billion, $197 billion, $130 billion and $103 billion at December 31, 2000, 1999, 1998, 1997 and 1996, respectively.


		Average		Average
		Maturity		Cost(1)		Outstanding

						(Dollars = in
						millions)
Debentures, notes and bonds, net




	Due within one year:




		Short-term notes			3 = mos.				6.50	%		$	178,291




		Universal Benchmark			5 = mos.				5.71				6,984




		Universal Retail			3 = mos.				6.62				785




		Universal Short-term other			6 = mos.				6.59				41,457




		Universal Standard			9 = mos.				6.02				51,185




		Other(2)			—				6.37				1,620

			Total due within one year											280,322

	Due after one year:




		Universal Benchmark		7 = yrs. 2 mos.			6.42	%			185,771




		Universal Retail		6 = yrs. 9 mos.			6.82				7,083




		Universal Standard				5 = yrs.			6.42				165,680




		Other				16 = yrs.			8.58				3,826

			Total due after one year											362,360

Total debentures, notes and bonds, net										$	642,682

Stockholders’ equity:
		Preferred stock, $50 stated value; 100,000,000 shares=20 authorized—45,550,000 shares issued




			Series A, 7,500,000 shares issued										$	375




			Series B, 7,500,000 shares issued											375




			Series C, 5,000,000 shares issued											250




			Series D, 3,000,000 shares issued											150




			Series E, 3,000,000 shares issued											150




			Series F, 13,800,000 shares issued											690




			Series G, 5,750,000 shares issued											288




		Common stock, $.525 stated value, no maximum authorization— 1,129 million shares issued											593




	Additional paid-in capital											1,588




	Retained earnings											21,619




Accumulated other comprehensive loss											10

											26,088

	Less treasury stock, at cost—130 million shares											5,250

	Total stockholders’ equity										$	20,838


	(1)	Represents weighted-average cost, which includes the=20 amortization of discounts, premiums, issuance costs, hedging=20 results, and the effects of currency and debt swaps.
	(2)	Average maturity is indeterminate because the outstanding amount=20 includes investment agreements that have varying maturities.


Specified Currencies		Benchmark Bills will be denominated only in U.S. dollars.=20 Short-Term Notes may be denominated in U.S. dollars or non-U.S.=20 dollar currencies.

Denomination		Benchmark Bills and Short-Term Notes other than 183 Day Notes=20 (as defined under “United States Taxation” in this=20 Appendix B) denominated in U.S. dollars generally will have minimum denominations of $1,000 and additional increments of=20 $1,000.

		We will establish denominations for Short-Term Notes denominated=20 in British pounds sterling, Canadian dollars, Euros, yen or=20 other non-U.S. dollar currencies at the time we issue those Short-Term Notes.

		183 Day Notes will have minimum denominations of $500,000 or, in=20 the case of non-U.S. dollar denominated 183 Day Notes, the=20 foreign currency equivalent (determined using the spot rate on=20 the date of issuance).

Maturity		360 days or less

Principal Amount		The amount payable at maturity of Benchmark Bills and Short-Term=20 Notes will be their face amount. See also “Description of=20 the Debt Securities—Payments.”

Interest		Benchmark Bills and most Short-Term Notes will not bear interest=20 but will be sold at a discount from their principal amount at=20 maturity. We also may issue interest-bearing Short-Term Notes,=20 the terms of which we will establish at the time of issuance.

Business Day Convention		For Fed Book-Entry Securities, “Business Day” means=20 any day other than a Saturday, a Sunday, a day on which the=20 Federal Reserve Bank of New York is closed, or, with respect to any required payment, a day on which the U.S. Federal Reserve=20 Bank maintaining the book-entry account relating to the Fed=20 Book-Entry Security is closed.

		For Global Book-Entry Securities, “Business Day” means=20 any day other than a Saturday, a Sunday, a day on which banking=20 institutions are closed in New York, New York, a day on which=20 banking institutions are closed in the Principal Financial=20 Center of the country issuing the Specified Payment Currency (in the case where the Specified Payment Currency is other than U.S. dollars or Euro), or a day on which banking institutions are required or permitted by law to close in the place of payment to the Holder (in the case where the Specified Payment Currency is Euro, whether or not pursuant to redenomination).

		If an Interest Payment Date or Principal Payment Date is not a=20 Business Day, we will pay the interest or principal on the next=20 Business Day. In that case, you will receive no interest on the=20 delayed interest or principal payment for the period from and=20 after the scheduled Interest Payment Date or Principal Payment=20 Date to the actual date of payment.

Form		We will issue Benchmark Bills and most U.S. dollar-denominated=20 Short-Term Notes as Fed Book-Entry Securities. We will issue=20 other Short-Term Notes as Global Book-Entry Securities through=20 DTC, Euroclear, Clearstream or other book-entry systems. See=20 “Description of the Debt Securities—Book-Entry=20 Systems” and “—Ownership of Debt Securities in=20 Book-Entry Form.”

		We will issue 183 Day Notes as Global Book-Entry Securities.

Redemption		Benchmark Bills and Short-Term Notes will not be redeemable=20 prior to maturity.

Tax Matters		Benchmark Bills and Short-Term Notes and payments thereon=20 generally are subject to taxation by the United States and=20 generally are not exempt from taxation by other U.S. or non-U.S.=20 taxing jurisdictions. Non-U.S. Persons generally will be subject=20 to U.S. income and withholding tax unless they provide required=20 certifications or statements. See “United States=20 Taxation” below and in the Offering Circular for additional=20 information.

Listing		We do not intend to list Benchmark Bills and Short-Term Notes on=20 any exchange.

Offering Price		Benchmark Bills and non-interest bearing Short-Term Notes will=20 be offered at a discount to par. See “Distribution of=20 Benchmark Bills and Short-Term Notes” below for additional=20 information.

Clearance and Settlement		Depending on the terms of an issue of Benchmark Bills or=20 Short-Term Notes and where they are to be offered, Benchmark=20 Bills or Short-Term Notes may clear and settle through one or=20 more of the following:

		• the U.S. Federal Reserve Banks

		• DTC

		• Euroclear

		• Clearstream

		• other designated clearing systems

		We expect issues of Benchmark Bills and most Short-Term Notes=20 denominated and payable in U.S. dollars, to clear and settle=20 through the Fed Book-Entry System. These Debt Securities=20 generally may be held indirectly through other clearing systems,=20 such as the systems operated by Euroclear and Clearstream.

		We expect issues of Short-Term Notes denominated and payable in U.S. dollars not cleared and settled through the Fed Book-Entry System to clear and settle through the systems operated by DTC, and indirectly through Euroclear and Clearstream. We expect issues of Short-Term Notes denominated or payable in a specified currency other than U.S. dollars to clear and settle through the systems operated by Euroclear, Clearstream or other designated clearing systems.

Governing Law		Benchmark Bills and Short-Term Notes issued as Fed Book-Entry=20 Securities (including rights and obligations) will be governed=20 by, and construed in accordance with, regulations adopted by the=20 U.S. Department of Housing and Urban Development or any other=20 U.S. governmental body or agency that are applicable to the Fed=20 Book-Entry Securities, and, to the extent that these regulations=20 do not apply, the laws of the State of New York, U.S.A.=20 Benchmark Bills and Short-Term Notes issued as Global Book-Entry=20 Securities will be governed by, and construed in accordance=20 with, the laws of the State of New York, U.S.A.

Fiscal and Global Agents		The Federal Reserve Bank of New York will act as fiscal agent=20 for Benchmark Bills and Short-Term Notes issued as Fed=20 Book-Entry Securities, under a Fiscal Agency Agreement effective=20 as of January 2, 1969, between Fannie Mae and the Federal=20 Reserve Bank of New York. The Chase Manhattan Bank will act as=20 global agent for Global Book-Entry Securities. See=20 “Description of the Debt Securities—Fiscal Agent and=20 Global Agent.”

Selling Restrictions		Restrictions exist in certain jurisdictions on the Dealers’=20 offer, sale and delivery of Benchmark Bills and Short-Term Notes=20 and the distribution of offering materials relating to Benchmark=20 Bills and Short-Term Notes. See “Distribution of Benchmark=20 Bills and Short-Term Notes—183 Day Notes Selling=20 Restriction” below and Appendix E to the Offering=20 Circular for a description of these restrictions.


Status; Subordination		The Subordinated Debt Securities will be unsecured subordinated obligations of Fannie Mae issued under Section 304(e) of the Charter Act. The Subordinated Debt Securities will rank junior in priority of payment to our “Senior Liabilities”. “Senior Liabilities” means all existing and future liabilities of Fannie Mae, other than liabilities that by their terms expressly rank equal with or junior to Subordinated Debt Securities. Senior Liabilities include, but are not limited to, debt obligations issued under Section 304(b) of the Charter Act, liabilities in respect of our guarantees on mortgage-backed securities and Fannie Mae’s Outstanding Capital Debentures. The Subordinated 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 Fannie Mae.

		At December 31, 2000, we had outstanding total liabilities of $654,234 million, all of which constitute Senior Liabilities. Senior Liabilities also include any liabilities related to the $706,684 million of mortgage-backed securities outstanding at that date on which Fannie Mae guarantees timely payment of principal and interest. This excludes $351,066 million of mortgage-backed securities held by us in portfolio at that date.

Redemption		Unless otherwise specified in an applicable Pricing Supplement, the Subordinated Debt Securities will not be subject to redemption by us prior to maturity.

Interest:

Deferral of Interest		We will defer the payment of interest on all outstanding Subordinated Debt Securities if, as of the fifth Business Day prior to an Interest Payment Date on any Subordinated Debt Securities (each, a “Deferral Determination Date”):

		• our “core capital” is below 125% of our “critical capital” requirement,

		or

		• (1) our “core capital” is below our “minimum capital” requirement and (2) the U.S. Secretary of the Treasury, acting on our request, exercises his or her discretionary authority pursuant to Section 304(c) of the Charter Act to purchase our debt obligations.

		We will use the core, critical and minimum capital levels most recently announced by the Office of Federal Housing Enterprise Oversight (“OFHEO”), pursuant to its then current=20 methodology for calculating those levels, prior to any such=20 Deferral Determination Date to determine whether we must defer=20 interest on all outstanding Subordinated Debt Securities.

		If legislation is enacted that revises the definition of core,=20 critical or minimum capital, or if OFHEO ceases to announce any=20 of these capital levels, Fannie Mae will calculate any revised=20 or no longer announced capital levels on a monthly basis in=20 accordance with the current statutory definitions and the=20 then-current OFHEO requirements. An independent third party will=20 verify any capital levels that we are required to calculate.=20 Upon such third party verification, we will publicly announce=20 the results.

		Based on the most recent OFHEO announcement regarding our core=20 capital and minimum capital levels, at September 30, 2000,=20 Fannie Mae had core capital of $19,870 million or 200.3% of=20 our critical capital requirement of $9,918 million and=20 $489 million above our minimum capital requirement of=20 $19,381 million as of that date.

		“Core capital” is the sum of:

		• the stated value of=20 our outstanding common stock,

		• the stated value of=20 our non-cumulative perpetual preferred stock,

		• paid in capital, and

		• retained earnings.

		“Critical capital” is the sum of:

		• 1.25% of on-balance=20 sheet assets,

		• .25% of outstanding=20 mortgage-backed securities, and

		• .25% of other=20 off-balance sheet obligations, which may be adjusted by the=20 Director of OFHEO under certain circumstances.

		“Minimum capital” is the sum of:

		• 2.50% of on-balance=20 sheet assets,

		• .45% of outstanding=20 mortgage-backed securities, and

		• .45% of other off-balance sheet obligations, which may be adjusted by the Director of OFHEO under certain circumstances. (See 12 CFR §1750.4 for existing adjustments made by the Director of OFHEO.)

		We may not defer interest on any Subordinated Debt Securities=20 for more than five consecutive years nor beyond their Maturity=20 Date.

Accrual of Interest on Deferred Amounts		If we defer the payment of interest on the Subordinated Debt=20 Securities, interest will continue to accrue on the Subordinated=20 Debt Securities and compound at the stated coupon rates of such=20 Subordinated Debt Securities.

Resumption of Interest Payments		We will pay all deferred interest, and interest on that deferred=20 interest, on all Subordinated Debt Securities as soon as, after=20 giving effect to such payments, we no longer would be required=20 to defer interest under the terms described above, and we have=20 repaid all debt obligations, if any, purchased by the=20 U.S. Secretary of the Treasury as described above. We will=20 make this payment in respect of all Subordinated Debt Securities on the next scheduled Interest Payment Date that occurs in=20 respect of any issue of Subordinated Debt Securities, unless we=20 elect to make the payment earlier.

		If we have not resumed interest payments on an issue of=20 Subordinated Debt Securities by its Maturity Date or have=20 deferred interest on an issue of Subordinated Debt Securities=20 for five consecutive years, then we must pay deferred interest,=20 and interest thereon, on that issue of Subordinated Debt=20 Securities regardless of our core capital levels or our=20 repayment of all debt obligations purchased by the=20 U.S. Secretary of the Treasury. Even if we are required to=20 make any payment on Subordinated Debt Securities, because=20 Subordinated Debt Securities are subordinated, Holders of=20 Subordinated Debt Securities will be entitled to receive=20 payments only after we have made payment in full of all amounts=20 then due in respect of Senior Liabilities. In no event will=20 Holders of Subordinated Debt Securities be able to accelerate=20 the maturity of their Subordinated Debt Securities; such Holders=20 will have claims only for amounts then due and payable on their=20 Subordinated Debt Securities. After we have fully paid all=20 deferred interest on any issue of Subordinated Debt Securities=20 and if that issue of Subordinated Debt Securities remains=20 outstanding, future interest payments on that issue of=20 Subordinated Debt Securities will be subject to further deferral=20 as described above.

No Dividends during Deferral Periods		During periods when we defer the payment of interest on the=20 Subordinated Debt Securities, we may not declare or pay=20 dividends on, or redeem, purchase or acquire, our common stock=20 or our preferred stock.

No Acceleration Right		The Subordinated Debt Securities will not contain any provisions permitting the Holders to accelerate the maturity thereof on the occurrence of any default or other event.

Form		Subordinated Benchmark Notes will be issued as Fed Book-Entry=20 Securities. Other Subordinated Debt Securities may be issued as=20 Fed Book-Entry Securities or Global Book-Entry Securities.

Notices		We will give prompt notice of any event that would require=20 deferral of the payment of interest on the Subordinated Debt=20 Securities. We will also give notice of the resumption of the=20 payment of interest on the Subordinated Debt Securities. See “Description of the Debt Securities — Notices” in the Offering Circular.

Listing		We will apply to list Subordinated Benchmark Notes on the=20 Luxembourg Stock Exchange. We may apply to list other=20 Subordinated Debt Securities on the Luxembourg Stock Exchange or=20 other exchanges.


Austrian schilling Belgian franc Dutch guilder Finnish markka French franc German mark			13.7603 40.3399 2.20371 5.94573 6.55957 1.95583			Irish = punt Italian lira Luxembourg franc Portuguese escudo Spanish peseta			0.787564 1936.27 40.3399 200.482 166.386


Terms	Page

183-Day Notes		B-4




A




Accrual Methods		18




Actual/Actual (Accrual Basis)		18




Actual/Actual (Payment Basis)		18




Actual/360		18




Actual/365 (Fixed)		18




Amortizable Bond Premium		38




Amortizing Securities		17




Applicable Index		8




B




Benchmark Securities		3




Business Day Convention		18




Business Day		18




C




Calculation Agent		17




Call		36




Callable Principal Components		42




Cap		16




Cent		F-1




Charter Act		50




Clearing Agency		32




Clearing Corporation		32




Clearstream		19




CMT Rate (Weekly Average)		D-8




Common Depositary		19




Component Holders		20




Controlled Foreign Corporation		45




Core Capital		C-2




Critical Capital		C-2




Currency Exchange Bank		30




Cut Off Date		20




D




Dealer Agreement		46




Dealers		46




Deferral Determination Date		C-1




Determination Date		16




DTC		19




E




Earnings		50




Eligible Securities		20




EURIBOR		D-2




Euro		F-1




Euroclear		19




Euroclear Bank		19




Exempted Securities		2




F




Fed Book Entry Securities		12




Fed Book-Entry System		19




Federal Funds Rates		D-4




Federal Funds Rate (Daily)		D-4




Federal Funds Rate (Weekly Average)		D-4




Federal Reserve Board		D-5




Fiscal Agency Agreement		31




Fiscal Agent		6




Fixed Charges		50




Fixed Conversion Rate		F-1




Fixed Rate Securities		14




Fixed/Variable Rate Securities		14




Floor		16




Fully Taxable Bonds		38




G




Global Agency Agreement		31




Global Book-Entry Securities		12




H




Holder		23




Holding Institutions		23




HUD Book-Entry Regulations		19




I




Indexed Securities		17




Index Maturity		15




Interest Component		20




Information Statement		51




Interest Payment Date		15




Interest Period		15




Interest Reset Period		16




IRS		35




Issue Price		36




L




Legal Currencies		41




LIBOR		D-1




M




Maturity Date		14




MBS		50




Minimum Capital		C-2




Multiplier		15




N




Non-U.S. Currency		40




O




OFHEO		C-2




OID		35




OID Regulations		36




Original Issue Discount		27




Outstanding Capital Debentures		8




P




Participating Member State		F-1




Pricing Supplement		2




Principal Amount		27




Principal Financial Center		19




Prime Rate		D-6




Principal Component		20




Principal Payment Date		15




Q




Qualified Stated Interest		36




R




Record Date		25




Registrar		23




Reopening		14




Reset Date		16




S




Selling Restrictions		48




Senior Liabilities	8, = 21, C-1




Specified Currency		13




Specified Payment Currency		13




Spread		15




Statement of Terms		12




Step Rate Securities		14




Street Name		25




Stripping		20




Subordinated Debt Securities		21




T




TARGET System		18




Targeted Registered Securities		G-1




Treasury Bill Rate		D-7




Treaty		F-1




U




U.S. Person		34




V




Variable Rate Securities		14




W




Withholding Agent		43




Z




Zero-Coupon Securities		14