UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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 31, 2006

Federal National Mortgage Association

(Exact name of registrant as specified in its charter)

Federally Chartered Corporation		000-50231		52-0883107
(State or other jurisdiction		(Commission		(I.R.S. Employer
of incorporation)		File Number)		Identification No.)

3900 Wisconsin Avenue, NW, Washington,
District of Columbia		20016
(Address of principal executive offices)		(Zip Code)

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

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Not Applicable
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:

o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 7.01. Regulation FD Disclosure.

     On January 31, 2006, Fannie Mae (formally, the Federal National Mortgage Association) issued its monthly financial summary release for the month of December 2005. The summary, a copy of which is furnished as Exhibit 99.1 to this report, is incorporated herein by reference.

     The information in this item, including Exhibit 99.1 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.

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 31, 2006

EXHIBIT INDEX

The following exhibit is submitted herewith:

Exhibit Number		Description of Exhibit
99.1		Monthly summary release for December 2005 issued by Fannie Mae on January 31, 2006

EXHIBIT 99.1

FANNIE MAE
MONTHLY SUMMARY
DECEMBER 2005

HIGHLIGHTS FOR DECEMBER INCLUDE:

•

Fannie Mae’s book of business grew at a compound annualized rate of 8.3 percent in December, driven by the mortgage portfolio, which grew at a 21.4 percent compound annualized rate.

•

Portfolio purchases rose to $28.8 billion in December from $16.0 billion the previous month, aided by continued strength in net retained commitments of $19.6 billion, as investment spreads widened and portfolio sales remained modest.

•

Total business volume rose to $57.9 billion from $52.0 billion the previous month.

•

Lender-originated MBS issues were $39.6 billion. Outstanding MBS growth slowed to a 2.9 percent compound annualized rate in December, as the portfolio increased its purchase of Fannie Mae MBS to $10.4 billion from $1.8 billion the previous month.

•

The conventional single-family delinquency rate (90 days or more delinquent) rose thirteen basis points in November to 0.77 percent, attributable primarily to a rise in delinquencies on Gulf Coast properties. The multifamily delinquency rate (60 days or more delinquent) rose three basis points to 0.27 percent.

•

The duration gap on Fannie Mae’s mortgage portfolio averaged zero months in December.

MORTGAGE MARKET HIGHLIGHTS:

•

Fannie Mae estimates that single-family mortgage originations for 2005 totaled $2.84 trillion, compared with $2.73 trillion in 2004. Fannie Mae projects that single-family mortgage originations will decline to approximately $2.25 trillion in 2006.

BUSINESS BALANCES AND GROWTH ($ in Millions) 1/

		Mortgage Portfolio, Gross 2/								Outstanding MBS 3/								Book of Business
		End Balance				Growth Rate 4/				End Balance				Growth Rate 4/				End Balance				Growth Rate 4/
Full year 2004		$	904,555				0.7	%		$	1,402,761				7.9	%		$	2,307,316				4.9	%
January 2005		$	890,834				(16.8	%)		$	1,416,038				12.0	%		$	2,306,871				(0.2	%)
February 2005			875,245				(19.1	%)			1,430,825				13.3	%			2,306,070				(0.4	%)
March 2005			864,648				(13.6	%)			1,441,003				8.9	%			2,305,652				(0.2	%)
April 2005			851,936				(16.3	%)			1,445,353				3.7	%			2,297,288				(4.3	%)
May 2005			828,079				(28.9	%)			1,464,884				17.5	%			2,292,963				(2.2	%)
June 2005			808,225				(25.3	%)			1,485,149				17.9	%			2,293,374				0.2	%
July 2005			788,786				(25.3	%)			1,498,717				11.5	%			2,287,503				(3.0	%)
August 2005			768,280				(27.1	%)			1,520,943				19.3	%			2,289,223				0.9	%
September 2005			727,824				(47.8	%)			1,573,810				50.7	%			2,301,634				6.7	%
October 2005			717,254				(16.1	%)			1,587,014				10.6	%			2,304,268				1.4	%
November 2005			715,532				(2.8	%)			1,594,277				5.6	%			2,309,808				2.9	%
December 2005			727,173				21.4	%			1,598,079				2.9	%			2,325,251				8.3	%
Full year 2005		$	727,173				(19.6	%)		$	1,598,079				13.9	%		$	2,325,251				0.8	%

 

BUSINESS VOLUMES ($ in Millions) 1/

 

		MBS
						Fannie Mae				MBS Issues
		Lender-originated				MBS				Acquired				Portfolio				Business
		Issues 5/				Purchases 6/				by Others				Purchases				Volume
Full year 2004		$	527,146			$	64,604			$	462,542			$	262,647			$	725,189
January 2005		$	37,457			$	451			$	37,006			$	11,095			$	48,101
February 2005			31,259				538				30,721				9,446				40,167
March 2005			31,493				326				31,166				11,206				42,372
April 2005			36,838				429				36,409				8,865				45,274
May 2005			34,343				219				34,124				11,198				45,322
June 2005			40,039				210				39,829				8,964				48,793
July 2005			43,344				207				43,138				9,365				52,502
August 2005			46,540				176				46,363				11,564				57,927
September 2005			61,013				410				60,603				10,021				70,625
October 2005			41,563				446				41,117				10,136				51,253
November 2005			37,818				1,823				35,995				16,021				52,016
December 2005			39,553				10,393				29,160				28,760				57,920
Full year 2005		$	481,260			$	15,628			$	465,632			$	146,640			$	612,272

MORTGAGE PORTFOLIO COMMITMENTS, PURCHASES, AND SALES ($ in Millions) 1/

		Net												Mortgage
		Retained												Portfolio
		Commitments 7/				Purchases				Purchase Yield 8/				Sales
Full year 2004		$	256,144			$	262,647				4.22	%		$	16,449
January 2005		$	291			$	11,095				4.40	%		$	6,360
February 2005			2,578				9,446				4.73	%			9,539
March 2005			9,945				11,206				4.79	%			4,806
April 2005			5,104				8,865				5.04	%			1,680
May 2005			(8,768	)			11,198				4.99	%			17,812
June 2005			(3,185	)			8,964				5.33	%			10,350
July 2005			3,858				9,365				5.43	%			9,288
August 2005			(21,943	)			11,564				5.27	%			12,507
September 2005			(403	)			10,021				5.44	%			31,071
October 2005			8,314				10,136				5.50	%			4,437
November 2005			20,084				16,021				5.17	%			2,571
December 2005			19,595				28,760				5.43	%			2,876
Full year 2005		$	35,469			$	146,640				5.16	%		$	113,295

1/		Represents unpaid principal balance.
2/		Excludes mark-to-market adjustments, deferred balances and allowance for losses. Includes $342 billion of Fannie Mae MBS as of December 31, 2005.
3/		MBS held by investors other than Fannie Mae’s portfolio.
4/		Growth rates are compounded.
5/		Excludes MBS issued from Fannie Mae’s portfolio, which was $1,331 million in December 2005.
6/		Included in total portfolio purchases.
7/		Represents commitments to purchase, net of commitments to sell, entered into during the month, including any modifications to original amounts. Please refer to “Correction” on page 2 for more information. We made no revisions to 2004.
8/		Calculated as commitment yield for single-family loans, pass-thru rate for multifamily loans and coupon divided by price for securities. Yields are presented on a taxable-equivalent basis.
		Numbers may not sum due to rounding.

LIQUIDATIONS ($ in Millions) 1/																		DELINQUENCY RATES
		Mortgage Portfolio								Outstanding MBS								Single-family Conventional 2/												Multifamily
			Liquidations								Liquidations								Non-Credit				Credit
		Amount				Annual Rate				Amount				Annual Rate				Enhancement 3/				Enhancement 4/				Total 5/				Total 6/
Full year 2004		$	240,201				26.87	%		$	374,688				27.58	%
January 2005		$	18,480				24.70	%		$	30,063				25.60	%			0.35	%			1.88	%			0.65	%			0.10	%
February 2005			15,545				21.13	%			24,107				20.32	%			0.34	%			1.84	%			0.64	%			0.10	%
March 2005			17,049				23.52	%			24,956				20.86	%			0.31	%			1.72	%			0.59	%			0.09	%
April 2005			19,899				27.82	%			33,740				28.05	%			0.30	%			1.68	%			0.57	%			0.10	%
May 2005			17,301				24.72	%			27,844				22.96	%			0.30	%			1.68	%			0.57	%			0.10	%
June 2005			18,502				27.14	%			29,243				23.79	%			0.30	%			1.69	%			0.57	%			0.10	%
July 2005			19,575				29.42	%			34,429				27.69	%			0.32	%			1.74	%			0.59	%			0.08	%
August 2005			19,624				30.25	%			34,976				27.80	%			0.32	%			1.76	%			0.59	%			0.08	%
September 2005			19,468				31.23	%			37,036				28.72	%			0.33	%			1.78	%			0.61	%			0.09	%
October 2005			16,407				27.25	%			32,350				24.56	%			0.35	%			1.86	%			0.64	%			0.24	%
November 2005			15,247				25.54	%			31,156				23.50	%			0.46	%			2.11	%			0.77	%			0.27	%
December 2005			14,318				23.82	%			28,167				21.18	%
Full year 2005		$	211,416				26.25	%		$	368,067				24.59	%

 

AVERAGE INVESTMENT BALANCES

 

INTEREST RATE RISK DISCLOSURE

		Effective
		Duration Gap 7/
		(in months)
January 2005		-1
February 2005		0
March 2005		1
April 2005		-1
May 2005		-1
June 2005		0
July 2005		1
August 2005		0
September 2005		1
October 2005		1
November 2005		0
December 2005		0

1/		Represents unpaid principal balance.
2/		Includes conventional loans three or more months delinquent or in foreclosure process as a percent of the number of loans.
3/		Loans without primary mortgage insurance or any credit enhancements.
4/		Loans with primary mortgage insurance and/or other credit enhancements.
5/		Total of single-family non-credit enhanced and credit enhanced loans.
6/		Includes loans and securities 60 days or more past due and is calculated based on mortgage credit book of business.
7/		The duration gap is a weighted average for the month. Since October 2005, we have included non-mortgage assets and liabilities in the duration gap calculation. Our portfolio duration gap calculation excludes any interest rate sensitivity of the guarantee business.
		Numbers may not sum due to rounding.

•

Fannie Mae is revising its definition of net retained commitments and correcting an error in the company’s previously reported net retained commitments for 2005. These changes relate to activity information and do not impact the company’s financial statements. The company will no longer include optional commitments to purchase loans (where the other party does not have a corresponding obligation to sell the loans), until we actually purchase a loan under the commitment. This will result in an aggregate decrease of $7.5 billion in previously reported net retained commitments for 2005. Included in this $7.5 billion decrease is the correction of an error of $2.3 billion, principally due to the company’s inclusion of amounts both at the time we entered into the optional commitment, as well as when we purchased the loans. Purchases are not affected by these revisions to net retained commitments.

In connection with the pending re-audit and restatement of Fannie Mae’s previously published financial statements, management is undertaking a comprehensive review of Fannie Mae’s accounting routines and controls, financial reporting process and the application of generally accepted accounting principles. While most of the information contained in this summary is not derived from Fannie Mae’s financial statements, we expect that some of this information will be impacted by the re-audit and restatement. Management believes that the information may be useful to investors for comparing current business activities with those of prior periods and for reviewing trends in our business, notwithstanding that information may change, perhaps materially, from what is reported herein. Issues under review that will cause some of this information to change include those related to securities accounting, loan accounting, consolidation and amortization. More information regarding the re-audit and restatement may be found in Form 8-Ks Fannie Mae filed with the Securities and Exchange Commission on December 22, 2004, March 18, 2005, May 11, 2005, August 9, 2005 and November 10, 2005.

For more information about Fannie Mae, please visit www.fanniemae.com or contact us at (202) 752-7115.