Pricing Supplement dated September 22, 1999 (To Offering Circular dated September 15, 1998) FANNIE MAE Medium-Term Notes, Series B This Pricing Supplement relates to the issue of Medium-Term Notes, Series B described below (the "Notes"). You should read it together with the Offering Circular dated September 15, 1998 (the "Offering Circular"), relating to the Medium-Term Notes, Series B of the Federal National Mortgage Association ("Fannie Mae"). Capitalized terms have the meanings we gave to them in the Offering Circular, unless we specify otherwise. The Notes, together with interest thereon, are not guaranteed by the United States and do not constitute a debt or obligation of the United States or of any agency or instrumentality thereof other than Fannie Mae. CUSIP Number: 31364KAD2 Certain Securities Terms 1. Principal Amount: $40,000,000.00 2. Issue Date (expected Settlement Date): September 29, 1999 3. Maturity Date: September 27, 2002 a. Amount Payable on the Maturity Date: 100% of principal amount 4. Subject to Redemption Prior to Maturity Date __ No X Yes; in whole or in part, at our option, at a redemption price of 100% of the principal amount redeemed, plus accrued interest thereon to the date of redemption X at any time (and from time to time) on or after September 27, 2000 __ on ____________ __ on each Interest Payment Date commencing ___________ 5. Interest Category: Fixed Rate Notes 6. Interest a. Frequency of Interest Payments X Semiannually __Other: _____________ b. Interest Payment Dates: 27th day of each March and September c. First Interest Payment Date: March 27, 2000 d. Interest rate per annum: 6.51% 7. Denominations: $1,000 and additional increments of $1,000 Additional Information about the Notes 1. Additional Tax Information: See Annex 1 Offering 1. Pricing Date: September 22, 1999 2. Method of Distribution: X Principal __ Non-Underwritten 3. The following dealers have agreed jointly and severally to purchase all the Notes: Prudential Securities Incorporated Fuji Securities, Inc. a. If Multiple Dealers, Representative(s): Prudential Securities Incorporated 4. Offering Price: X Fixed Offering Price: 100.00%, plus accrued interest, if any, from the Settlement Date __ Variable Price Offering 5. If Fixed Offering Price, discount to Dealer(s): 0.15% of principal amount 6. Price to Dealer(s): 99.85% of principal amount 7. Proceeds to Fannie Mae: $39,940,000.00 8. Concession: 0.125% Reallowance: 0.10% ANNEX 1 To Pricing Supplement Dated September 22, 1999 Issue (Title): 6.51% Medium-Term Notes, Series B Due September 27, 2002 UNITED STATES TAXATION We have engaged Arnold & Porter as special tax counsel to review the discussion in the Offering Circular under the heading "United States Taxation." They have given us their written legal opinion that the discussion, when read with the following paragraph, correctly describes the principal aspects of the United States federal tax treatment of investors who purchase the Notes described in the Offering Circular. This discussion, and the discussion in the Offering Circular, are general discussions that may not apply to your particular circumstances. New Effective Date for Withholding and Information Reporting Regulations The Offering Circular describes new regulations relating to withholding, backup withholding and information reporting with respect to payments to non-U.S. Persons. In April 1999, the IRS announced a delay in the effective date of those regulations. Pursuant to the IRS announcement, the regulations will be effective for payments made after December 31, 2000. The IRS announcement also delayed the date on which certain U.S. information reporting rules will apply to the foreign office of a foreign broker that is a foreign partnership with specific connections with the U.S. These rules will now apply to payments made by such partnerships after December 31, 2000.