FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 21, 2005

Federal National Mortgage Association

Fannie Mae

Registrant’s telephone number, including area code: 202-752-7000

(Former Name or Former Address, if Changed Since Last Report):                               

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Item 7.01. Regulation FD Disclosure.

     On January 18, 2005, Fannie Mae (formally, the Federal National Mortgage Association) announced that its board of directors approved dividends on the company’s common stock and preferred stock. The announcement indicated that the board of directors decided to reduce the first quarter common stock dividend by 50 percent in order to increase in the company’s capital. The announcement, a copy of which is furnished as Exhibit 99.1 to this report, is incorporated herein by reference.

     On January 21, 2005, Fannie Mae issued its monthly financial summary release for the month of December 2004. The summary, a copy of which is furnished as Exhibit 99.2 to this report, is incorporated herein by reference.

     The information in this item, including the exhibits submitted herewith, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any disclosure document of Fannie Mae, except as shall be expressly set forth by specific reference in such document.

Item 9.01. Financial Statements and Exhibits.

     (c) Exhibits. The exhibit index filed herewith is incorporated herein by reference.

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Date:     January 24, 2005

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EXHIBIT INDEX

     The following exhibits are submitted herewith:

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EXHIBIT 99.1

Media Hotline: 1-888-326-6694
Consumer Resource Center: 1-800-732-6643

Fannie Mae Announces Reduction in First Quarter Common Stock Dividend as Company Builds Capital

WASHINGTON, DC — The Board of Directors of Fannie Mae (FNM/NYSE) today declared its first quarter dividend on the company’s common stock of twenty-six cents ($0.26) per share and dividends on the company’s preferred stock in accordance with the terms of the stock. The Board decided to reduce the first quarter common stock dividend by 50 percent in order to accelerate an increase in the company’s capital. The Office of Federal Housing Enterprise Oversight (OFHEO) has approved payment of these dividends.

“The Board of Directors believes that this is a prudent and responsible action to take as the company moves expeditiously to increase its capital,” said Stephen Ashley, non-executive chairman of the Fannie Mae Board of Directors. Fannie Mae has submitted a capital restoration plan to OFHEO for its review and approval and is working with OFHEO to address any comments or concerns. “We look forward to continue working with OFHEO to attain the capital restoration plan,” Ashley added. Reducing the common stock dividend will contribute toward building Fannie Mae’s capital to a 30 percent surplus over its minimum capital requirement.

On December 21, 2004, OFHEO classified Fannie Mae as significantly undercapitalized as of September 30, 2004, which requires the Director of OFHEO’s approval before the payment of any dividend on Fannie Mae’s capital stock. The Board will continue to assess dividend payments for each quarter, and OFHEO has indicated that it will continue to review dividend payment requests for each quarter based upon the facts and conditions existing at the time.

The dividend payments declared by the Board are as follows:

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First Quarter Common Stock Dividend
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The dividend payment on the common stock will be made to registered holders of common stock as shown on the books of the corporation at the close of business on January 31, 2005, to be payable on February 25, 2005. The preferred stock dividends were declared in accordance with their respective Certificate of Designation of Terms, all of which are available on the company’s Web site, www.fanniemae.com.

A dividend of $0.65625 per share will be paid to the registered holders of preferred stock, Series D, as shown on the books of the corporation at the close of business on March 15, 2005, that is outstanding at the close of business on March 15, 2005, for the period from and including December 31, 2004, to but excluding March 31, 2005, to be payable on March 31, 2005.

A dividend of $0.63750 per share will be paid to the registered holders of preferred stock, Series E, as shown on the books of the corporation at the close of business on March 15, 2005, that is outstanding at the close of business on March 15, 2005, for the period from and including December 31, 2004, to but excluding March 31, 2005, to be payable on March 31, 2005.

A dividend of $0.1713 per share will be paid to the registered holders of preferred stock, Series F, as shown on the books of the corporation at the close of business on March 15, 2005, that is outstanding at the close of business on March 15, 2005, for the period from and including December 31, 2004, to but excluding March 31, 2005, to be payable on March 31, 2005.

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First Quarter Common Stock Dividend
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A dividend of $0.2938 per share will be paid to the registered holders of preferred stock, Series G, as shown on the books of the corporation at the close of business on March 15, 2005, that is outstanding at the close of business on March 15, 2005, for the period from and including December 31, 2004, to but excluding March 31, 2005, to be payable on March 31, 2005.

A dividend of $0.7263 per share will be paid to the registered holders of preferred stock, Series H, as shown on the books of the corporation at the close of business on March 15, 2005, that is outstanding at the close of business on March 15, 2005, for the period from and including December 31, 2004, to but excluding March 31, 2005, to be payable on March 31, 2005.

A dividend of $0.6719 per share will be paid to the registered holders of preferred stock, Series I, as shown on the books of the corporation at the close of business on March 15, 2005, that is outstanding at the close of business on March 15, 2005, for the period from and including December 31, 2004, to but excluding March 31, 2005, to be payable on March 31, 2005.

A dividend of $0.5895 per share will be paid to the registered holders of preferred stock, Series J, as shown on the books of the corporation at the close of business on March 15, 2005, that is outstanding at the close of business on March 15, 2005, for the period from and including December 31, 2004, to but excluding March 31, 2005, to be payable on March 31, 2005.

In accordance with the terms of our preferred stock, Series K, on March 18, 2005, the dividend rate for Series K preferred stock will be replaced by the applicable 2-year swap rate plus 1.33 percent. The dividend for the period from and including December 31, 2004, to but excluding March 31, 2005, is therefore subject to the approval of our Board of Directors after the new rate is determined but before the payment date on March 31, 2005.

A dividend of $0.6406 per share will be paid to the registered holders of preferred stock, Series L, as shown on the books of the corporation at the close of business on March 15, 2005, that is outstanding at the close of business on March 15, 2005, for the period from and including December 31, 2004, to but excluding March 31, 2005, to be payable on March 31, 2005.

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First Quarter Common Stock Dividend
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A dividend of $0.5938 per share will be paid to the registered holders of preferred stock, Series M, as shown on the books of the corporation at the close of business on March 15, 2005, that is outstanding at the close of business on March 15, 2005, for the period from and including December 31, 2004, to but excluding March 31, 2005, to be payable on March 31, 2005.

A dividend of $0.6875 per share will be paid to the registered holders of preferred stock, Series N, as shown on the books of the corporation at the close of business on March 15, 2005, that is outstanding at the close of business on March 15, 2005, for the period from and including December 31, 2004, to but excluding March 31, 2005, to be payable on March 31, 2005.

A dividend of $0.8847 per share will be paid to the registered holders of preferred stock, Series O, as shown on the books of the corporation at the close of business on March 15, 2005, that is outstanding at the close of business on March 15, 2005, for the period from and including December 30, 2004, to but excluding March 31, 2005, to be payable on March 31, 2005.

A dividend of $1,358.68 per share will be paid to the registered holders of Convertible Series 2004-1 preferred stock, as shown on the books of the corporation at the close of business on March 15, 2005, that is outstanding at the close of business on March 15, 2005, for the period from and including December 30, 2004, to but excluding March 31, 2005, to be payable on March 31, 2005.

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Fannie Mae is a New York Stock Exchange company and the largest non-bank financial services company in the world. It operates pursuant to a federal charter and is the nation’s largest source of financing for home mortgages. Fannie Mae has pledged through its “American Dream Commitment” to expand access to homeownership for millions of first-time home buyers; help raise the minority homeownership rate to 55 percent; make homeownership and rental housing a success for millions of families at risk of losing their homes; and expand the supply of affordable housing where it is needed most. Since 1968, Fannie Mae has provided $6.3 trillion of mortgage financing for 63 million families. More information about Fannie Mae can be found on the Internet at http://www.fanniemae.com.

Style Usage: Fannie Mae’s Board of Directors has authorized the company to operate as “Fannie Mae,” and the company’s stock is now listed on the NYSE as “FNM.” In order to facilitate clarity and avoid confusion, news organizations are asked to refer to the company exclusively as “Fannie Mae.”

EXHIBIT 99.2

FANNIE MAE
MONTHLY SUMMARY

December 2004

HIGHLIGHTS FOR DECEMBER INCLUDE:

MORTGAGE MARKET HIGHLIGHTS

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The information presented in this report is unaudited and includes, in the opinion of management, all adjustments (consisting of normally recurring accruals) necessary for a fair presentation. Fannie Mae has announced that its previously issued financial statements and information should no longer be relied upon in light of the SEC’s determination that the financial statements were prepared applying accounting practices that did not comply with generally accepted accounting principles, or GAAP. Fannie Mae has also announced that it will restate its previously issued financial statements and that its audit committee has approved the engagement of new auditors to serve as Fannie Mae’s independent auditors for 2001 through 2004. It is possible that the re-audit and restatement of Fannie Mae’s financial statements may result in changes to some of the information in this report.

For more information about the restatement and the reaudit, please see the Form 8-Ks Fannie Mae filed with the SEC on December 22, 2004 and January 4, 2005. For more information regarding Fannie Mae, please visit www.fanniemae.com or contact us at (202) 752-7115.

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