QUANTUMONLINE.COM SECURITY DESCRIPTION:  Fannie Mae, 8.75% Non-Cumulative Mandatory Convertible Preferred Stock Series, 2008-1, liquidation preference $50 per share. The preferred shares are mandatorily convertible on 5/13/2011 into a variable number of Fannie Mae (NYSE: FNM) common shares based on the then current price of the common shares for 20 consecutive trading days ending the third trading day prior to the conversion date. The conversion settlement rate will be 1.5408 shares per unit if the then current market price is equal to or greater than $32.45 and 1.8182 shares per unit if the market price is equal to or less than $27.50. For market prices between those values the settlement rate will be $50 divided by the market value. The last reported sale price of the common stock on 5/8/2008 was $27.63 per share. The preferred shares are convertible any time at the holder’s option into 1.5408 shares of common stock. Non-cumulative distributions of 8.75% ($4.375) per annum will be paid quarterly on 3/31, 6/30, 9/30 & 12/31 to holders of record on the record date fixed by the board, not more than 45 days or less than 10 days prior to the payment date (NOTE: the ex-dividend date is at least 2 business days prior to the record date). The dividends are non-cumulative and if the board of directors does not declare a dividend or the company fails to pay a dividend declared by the board for any quarterly dividend period, the holder will not be entitled to receive any dividend for that quarterly period and the undeclared or unpaid dividend will not accumulate. Dividends paid by the preferred are eligible for the 15% tax rate on dividends under normal holding restrictions and are also eligible for the dividends received deduction for corporate holders (see page 54 of the prospectus for further information). In regard to the payment of dividends and upon liquidation, the preferred shares rank equally with other preferreds of the company and senior to the common shares of the company. See the IPO prospectus for further information on the mandatory convertible preferred stock and their mandatory conversion provisions by clicking on the ‘Link to IPO Prospectus’ provided below.

Stock Exchange	Cpn Rate Ann Amt	LiqPref CallPrice	Call Date Matur Date	Moodys/S&P Dated	Conversion Shares@Price	Distribution Dates	15% Tax Rate
OTCBBn OTCBBps	8.75% $4.375	$50.00 n.a.	5/13/2011 5/13/2011	Ca C 2/23/2011	1.5408@$32.45+ 1.8182@$27.50-	Suspended! 3/31, 6/30, 9/30 & 12/31 Click for MW ExDiv Date Click for Yahoo ExDiv Date	YES

Notes:  Mandatory conversion of each share of the preferred stock into 1.8182 shares of common stock effective 5/13/2011 per the Other OTC on 5/13/2011. ____________ September 10, 2008 -- Fannie Mae Permitted to Pay Third Quarter Preferred Stock Dividends. Fannie Mae (FNM/NYSE) today announced that the company has received the consent of the conservator, the Federal Housing Finance Agency (FHFA), and the United States Department of the Treasury to pay the previously declared but unpaid dividends on all of its outstanding preferred stock series, on September 30, 2008, as scheduled. The dividends were declared prior to FNM being placed in conservatorship, and are therefore an outstanding obligation to be honored. The record date, as previously announced, is September 15, 2008. Treasury's consent is limited solely to the payment of this previously declared but unpaid preferred stock dividend. As announced on Sunday, September 7, future common and preferred stock dividends will be eliminated.

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HOME PAGE:     http://www.fanniemae.com/
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Email Address

investor_relations1@fanniemae.com

Address and Phone Numbers

Address:   3900 Wisconsin Avenue NW, Washington, DC 20016
Main Phone Number	202-752-7000
Fax Number	202-752-4447
Investor Relations	202-752-7115
Toll Free Phone Number	800-732-6643

CEO -  Daniel H. Mudd

CFO -  Stephen M. Swad