SEC Filing | Fannie Mae

View:

Download DOC

Download PDF

Download XLS

2013 Q3 8K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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): November 7, 2013

Federal National Mortgage Association

(Exact name of registrant as specified in its charter)




Federally chartered corporation	000-50231	52-0883107
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)





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

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):



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))

The information in this report, including information in the exhibits submitted herewith, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of Section 18, nor shall it be deemed incorporated by reference into any disclosure document relating to Fannie Mae (formally known as the Federal National Mortgage Association), except to the extent, if any, expressly incorporated by specific reference in that document.

Item 2.02 Results of Operations and Financial Condition.

On November 7, 2013, Fannie Mae filed its quarterly report on Form 10-Q for the quarter ended September 30, 2013 and issued a news release reporting its financial results for the periods covered by the Form 10-Q. The news release, a copy of which is furnished as Exhibit 99.1 to this report, is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On November 7, 2013, Fannie Mae posted to its Web site a 2013 Third Quarter Credit Supplement presentation consisting primarily of information about Fannie Mae’s guaranty book of business. The presentation, a copy of which is furnished as Exhibit 99.2 to this report, is incorporated herein by reference. Fannie Mae’s Web site address is www.fanniemae.com. Information appearing on the company’s Web site is not incorporated into this report.

Item 9.01 Financial Statements and Exhibits.

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

SIGNATURES

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.




		FEDERAL NATIONAL MORTGAGE ASSOCIATION

	By	/s/ David C. Benson
		David C. Benson
		Executive Vice President and Chief Financial Officer

Date: November 7, 2013

EXHIBIT INDEX

The following exhibits are submitted herewith:




Exhibit Number			Description of Exhibit
99.1			News release, dated November 7, 2013
99.2			2013 Third Quarter Credit Supplement presentation, dated November 7, 2013

2013 Q3 Press Release

Resource Center: 1-800-732-6643

Exhibit 99.1

Contact: Pete Bakel

202-752-2034

Date: November 7, 2013

Fannie Mae Reports Net Income of $8.7 Billion and Comprehensive Income of $8.6 Billion for Third Quarter 2013


•	Fannie Mae reported net income of $8.7 billion, the company’s seventh consecutive quarterly profit, and comprehensive income of $8.6 billion for the third quarter of 2013.


•	Fannie Mae will pay taxpayers $8.6 billion in dividends in December 2013. After the December dividend payment, Fannie Mae will have paid an aggregate of approximately $114 billion in dividends to Treasury. Senior preferred stock outstanding and held by Treasury remained at $117.1 billion at September 30, 2013, as dividend payments do not offset Treasury draws.


•	Fannie Mae has funded the mortgage market with approximately $3.9 trillion in liquidity since 2009, enabling families to buy, refinance, or rent a home.


•	Fannie Mae continues to support the housing recovery and contribute to building a sustainable housing finance system for the future.

WASHINGTON, DC — Fannie Mae (FNMA/OTC) reported net income of $8.7 billion for the third quarter of 2013, compared with net income of $1.8 billion for the third quarter of 2012. Fannie Mae’s net income for the third quarter of 2013 was the company’s seventh consecutive quarterly profit. Fannie Mae reported comprehensive income of $8.6 billion for the third quarter of 2013, compared with comprehensive income of $2.6 billion for the third quarter of 2012. Fannie Mae reported a positive net worth of $11.6 billion as of September 30, 2013 and will pay $8.6 billion to taxpayers as a dividend on the senior preferred stock.

Fannie Mae’s strong third quarter results were driven primarily by continued stable revenues and credit-related income. Credit-related income was positively affected by an increase in home prices in the quarter, which resulted in a reduction in the company’s loss reserves; the recognition of compensatory fees received in connection with the Bank of America compensatory fee agreement; and a decline in the number of delinquent loans in the company’s single-family guaranty book of business. Year-over-year improvement in net income was due primarily to credit-related income in the third quarter of 2013 compared with credit-related expense in the third quarter of 2012, and fair value gains in the third quarter of 2013 compared with fair value losses in the third quarter of 2012.

Fannie Mae expects to remain profitable for the foreseeable future. While the company expects its annual earnings to remain strong over the next few years, its earnings may vary significantly from quarter to quarter and year to year due to many different factors, such as changes in interest rates or home prices.



Third Quarter 2013 Results		1

ABOUT FANNIE MAE’S CONSERVATORSHIP

Fannie Mae has operated under the conservatorship of the Federal Housing Finance Agency (“FHFA”) since September 6, 2008. Fannie Mae has not received funds from Treasury since the first quarter of 2012. The funding the company has received under its senior preferred stock purchase agreement with the U.S. Treasury has provided the company with the capital and liquidity needed to fulfill its mission of providing liquidity and support to the nation’s housing finance markets and to avoid a trigger of mandatory receivership under the Federal Housing Finance Regulatory Reform Act of 2008. For periods through September 30, 2013, Fannie Mae has requested cumulative draws totaling $116.1 billion and paid $105.3 billion in dividends to Treasury. Under the senior preferred stock purchase agreement, the payment of dividends cannot be used to offset prior draws. As a result, Treasury maintains a liquidation preference of $117.1 billion on the company’s senior preferred stock.

Treasury Draws and Dividend Payments


⁽¹⁾	Treasury draw requests are shown in the period for which requested and do not include the initial $1.0 billion liquidation preference of Fannie Mae’s senior preferred stock, for which Fannie Mae did not receive any cash proceeds. The payment of dividends cannot be used to offset prior Treasury draws.


⁽²⁾	The company’s dividend for the fourth quarter of 2013 is calculated based on the company’s net worth of $11.6 billion as of September 30, 2013 less the applicable capital reserve amount of $3.0 billion.


⁽³⁾	Amounts may not sum due to rounding.

In August 2012, the terms governing the company’s dividend obligations on the senior preferred stock were amended. The amended senior preferred stock purchase agreement does not allow the company to build a capital reserve. Beginning in 2013, the required senior preferred stock dividends each quarter equal the amount, if any, by which the company’s net worth as of the end of the preceding quarter exceeds an applicable capital reserve amount. The applicable capital reserve amount is $3.0 billion for each quarter of 2013 and will be reduced by $600 million annually until it reaches zero in 2018.

The amount of remaining funding available to Fannie Mae under the senior preferred stock purchase agreement with Treasury is currently $117.6 billion.

Fannie Mae is not permitted to redeem the senior preferred stock prior to the termination of Treasury’s funding commitment under the senior preferred stock purchase agreement. The limited circumstances under which Treasury’s funding commitment will terminate are described in “Business—Conservatorship and Treasury Agreements” in the company’s annual report on Form 10-K for the year ended December 31, 2012.



Third Quarter 2013 Results		2

PROVIDING LIQUIDITY AND SUPPORT TO THE MARKET

Fannie Mae provided approximately $3.9 trillion in liquidity to the mortgage market from January 1, 2009 through September 30, 2013 through its purchases and guarantees of loans, which enabled borrowers to complete 12.0 million mortgage refinancings and 3.4 million home purchases, and provided financing for 2.0 million units of multifamily housing.

Fannie Mae’s market share remained large in the first nine months of 2013 as the company has continued to meet the needs of the single-family mortgage market in the absence of substantial private capital. The company remained the largest single issuer of single-family mortgage-related securities in the secondary market in the third quarter of 2013, with an estimated market share of new single-family mortgage-related securities issuances of 48 percent, compared with 45 percent in the second quarter of 2013 and 52 percent in the third quarter of 2012.

Fannie Mae also remained a constant source of liquidity in the multifamily market. As of June 30, 2013 (the latest date for which information is available), the company owned or guaranteed approximately 21 percent of the outstanding debt on multifamily properties.



Third Quarter 2013 Results		3

HELPING TO BUILD A NEW HOUSING FINANCE SYSTEM

In addition to continuing to provide liquidity and support to the mortgage market, Fannie Mae has devoted significant resources toward helping to build a new housing finance system for the future, including pursuing the strategic goals identified by its conservator, FHFA. These strategic goals are: build a new infrastructure for the secondary mortgage market; gradually contract the company’s dominant presence in the marketplace while simplifying and shrinking its operations; and maintain foreclosure prevention activities and credit availability for new and refinanced mortgages.

CREDIT QUALITY

New Single-Family Book of Business: While making it possible for families to purchase, refinance, or rent a home, Fannie Mae has established responsible credit standards to protect homeowners as well as taxpayers. Since 2009, Fannie Mae has seen the effect of actions it took, beginning in 2008, to significantly strengthen its underwriting and eligibility standards and change its pricing to promote sustainable homeownership and stability in the housing market. As of September 30, 2013, 75 percent of Fannie Mae’s single-family conventional guaranty book of business consisted of loans it had purchased or guaranteed since the beginning of 2009. While Fannie Mae does not yet know how the single-family loans the company has acquired since January 1, 2009 will ultimately perform, given their strong credit risk profile and based on their performance so far, the company expects that in the aggregate these loans will be profitable over their lifetime, meaning the company’s fee income on these loans will exceed the company’s credit losses and administrative costs for them.

Single-family conventional loans acquired by Fannie Mae in the first nine months of 2013 had a weighted average borrower FICO credit score at origination of 754 and a weighted average original loan-to-value (“LTV”) ratio of 75 percent.



Third Quarter 2013 Results		4

Loss Reserves: The company’s total loss reserves decreased to $48.4 billion as of September 30, 2013 from $53.1 billion as of June 30, 2013 and $62.6 billion as of December 31, 2012. The company’s total loss reserves peaked at $76.9 billion as of December 31, 2011.

Fannie Mae’s single-family serious delinquency rate has declined each quarter since the first quarter of 2010, and was 2.55 percent as of September 30, 2013, compared with 5.47 percent as of March 31, 2010. This decrease is primarily the result of home retention solutions, foreclosure alternatives, and completed foreclosures, as well as the company’s acquisition of loans with stronger credit profiles since the beginning of 2009.



Third Quarter 2013 Results		5

HOME RETENTION SOLUTIONS AND FORECLOSURE ALTERNATIVES

To reduce the credit losses Fannie Mae ultimately incurs on its legacy book of business, the company has been focusing its efforts on several strategies, including reducing defaults by offering home retention solutions, such as loan modifications. Fannie Mae completed more than 37,000 loan modifications during the third quarter of 2013, bringing the total number of loan modifications the company has completed since January 1, 2009 to approximately 1 million.

Fannie Mae views foreclosure as a last resort. For homeowners and communities in need, the company offers alternatives to foreclosure. These solutions have enabled 1.3 million borrowers to avoid foreclosure since 2009. In dealing with homeowners in distress, the company first seeks home retention solutions, which enable borrowers to stay in their homes, before turning to foreclosure alternatives. When there is no viable home retention solution or foreclosure alternative that can be applied, the company seeks to move to foreclosure expeditiously in an effort to minimize prolonged delinquencies that can hurt local home values and destabilize communities.



		For the Nine Months Ended					For the Year Ended December 31
		September 30, 2013					2012					2011					2010
		Unpaid Principal Balance			Number of Loans		Unpaid Principal Balance			Number of Loans		Unpaid Principal Balance			Number of Loans		Unpaid Principal Balance				Number of Loans
	(Dollars in millions)
Home retention strategies:
Modifications		$	21,822		120,848		$	30,640		163,412		$	42,793		213,340		$	82,826			403,506
Repayment plans and forbearances completed		1,331			10,128		3,298			23,329		5,042			35,318		4,385				31,579
HomeSaver Advance first-lien loans		—			—		—			—		—			—		688				5,191
Total home retention strategies		23,153			130,976		33,938			186,741		47,835			248,658		87,899				440,276
Foreclosure alternatives:
Short sales		7,860			37,247		15,916			73,528		15,412			70,275		15,899				69,634
Deeds-in-lieu of foreclosure		1,917			11,681		2,590			15,204		1,679			9,558		1,053				5,757
Total foreclosure alternatives		9,777			48,928		18,506			88,732		17,091			79,833		16,952			—	75,391
Total loan workouts		$	32,930		179,904		$	52,444		275,473		$	64,926		328,491		$	104,851			515,667
Loan workouts as a percentage of single-family guaranty book of business		1.53		%	1.36	%	1.85		%	1.57	%	2.29		%	1.85	%	3.66		%		2.87	%

REFINANCING INITIATIVES

Through the company’s Refi Plus™ initiative, which offers refinancing flexibility to eligible Fannie Mae borrowers and includes HARP, the company acquired approximately 236,000 loans in the third quarter of 2013. Some borrowers’ monthly payments increased as they took advantage of the ability to refinance through Refi Plus to reduce the term of their loan, to switch from an adjustable-rate mortgage to a fixed-rate mortgage, or to switch from an interest-only mortgage to a fully amortizing mortgage. Even taking these into account, refinancings delivered to Fannie Mae through Refi Plus in the third quarter of 2013 reduced borrowers’ monthly mortgage payments by an average of $210.



Third Quarter 2013 Results		6

FORECLOSURES AND REO

Fannie Mae acquired 37,353 single-family REO properties, primarily through foreclosure, in the third quarter of 2013, compared with 36,106 in the second quarter of 2013. During the third quarter of 2013, REO dispositions slowed due to overall market conditions, resulting in an increase in inventory of single-family foreclosed properties as compared with the second quarter of 2013. As of September 30, 2013, the company’s inventory of single-family REO properties was 100,941, compared with 96,920 as of June 30, 2013. The carrying value of the company’s single-family REO was $10.0 billion as of September 30, 2013.

The company’s single-family foreclosure rate was 0.85 percent for the first nine months of 2013. This reflects the annualized total number of single-family properties acquired through foreclosure or deeds-in-lieu of foreclosure as a percentage of the total number of loans in Fannie Mae’s single-family guaranty book of business.




	For the Nine Months Ended September 30,
	2013				2012
Single-family foreclosed properties (number of properties):
Beginning of period inventory of single-family foreclosed properties (REO)	105,666				118,528
Total properties acquired through foreclosure	112,176				133,367
Dispositions of REO	(116,901		)		(144,670		)
End of period inventory of single-family foreclosed properties (REO)	100,941				107,225
Carrying value of single-family foreclosed properties (dollars in millions)	$	10,036			$	9,302
Single-family foreclosure rate	0.85			%	1.01			%

Fannie Mae’s financial data for the third quarter of 2013 are available in the accompanying Appendix; however, investors and interested parties should read the company’s Third Quarter 2013 Form 10-Q, which was filed today with the Securities and Exchange Commission and is available on Fannie Mae’s



Third Quarter 2013 Results		7

Web site, www.fanniemae.com. The company provides further discussion of its financial results and condition, credit performance, fair value balance sheets, and other matters in its Third Quarter 2013 Form 10-Q. Additional information about the company’s credit performance, the characteristics of its guaranty book of business, its foreclosure-prevention efforts, and other measures is contained in the “2013 Third Quarter Credit Supplement” at www.fanniemae.com.

# # #

In this release and the accompanying Appendix, the company has presented a number of estimates, forecasts, expectations, and other forward-looking statements regarding the company’s future financial results, including its profitability; the company’s future loss reserves; the company’s future revenues; the profitability of its loans; its future dividend payments to Treasury; the impact of the company’s actions to reduce credit losses; and the future fair value of the company’s trading securities and derivatives. These estimates, forecasts, expectations, and statements are forward looking statements based on the company’s current assumptions regarding numerous factors, including future home prices and the future performance of its loans. Actual results, and future projections, could be materially different from what is set forth in the forward-looking statements as a result of home price changes, interest rate changes, unemployment rates, other macroeconomic and housing market variables, the company’s future serious delinquency rates, government policy, credit availability, borrower behavior, including increases in the number of underwater borrowers who strategically default on their mortgage loan, the volume of loans it modifies, the nature, volume and effectiveness of its loss mitigation strategies and activities, significant changes in modification and foreclosure activity, management of its real estate owned inventory and pursuit of contractual remedies, changes in the fair value of its assets and liabilities, impairments of its assets, future legislative or regulatory requirements that have a significant impact on the company’s business such as a requirement that the company implement a principal forgiveness program, future updates to the company’s models relating to loss reserves, including the assumptions used by these models, changes in generally accepted accounting principles, changes to the company’s accounting policies, failures by its mortgage seller-servicers to fulfill their repurchase obligations to it, effects from activities the company takes to support the mortgage market and help borrowers, the conservatorship and its effect on the company’s business, the investment by Treasury and its effect on the company’s business, the uncertainty of the company’s future, the company’s future guaranty fee pricing and the impact of that pricing on the company’s competitive environment, challenges the company faces in retaining and hiring qualified employees, the deteriorated credit performance of many loans in the company’s guaranty book of business, a decrease in the company’s credit ratings, defaults by one or more institutional counterparties, resolution or settlement agreements the company may enter into with its counterparties, operational control weaknesses, changes in the structure and regulation of the financial services industry, limitations on the company’s ability to access the debt markets, disruptions in the housing, credit, and stock markets, government investigations and litigation, the performance of the company’s servicers, conditions in the foreclosure environment, natural or other disasters, and many other factors, including those discussed in the “Risk Factors” section of and elsewhere in the company’s annual report on Form 10-K for the year ended December 31, 2012 and the company’s quarterly report on Form 10-Q for the quarter ended September 30, 2013, and elsewhere in this release.

Fannie Mae provides Web site addresses in its news releases solely for readers’ information. Other content or information appearing on these Web sites is not part of this release.

Fannie Mae enables people to buy, refinance, or rent a home.

Visit us at www.fanniemae.com/progress



Third Quarter 2013 Results		8

APPENDIX

SUMMARY OF THIRD QUARTER 2013 RESULTS

Fannie Mae reported net income of $8.7 billion for the third quarter of 2013, compared with net income of $1.8 billion for the third quarter of 2012. Fannie Mae reported comprehensive income of $8.6 billion for the third quarter of 2013, compared with comprehensive income of $2.6 billion for the third quarter of 2012.



(Dollars in millions)	3Q13			2Q13			Variance			3Q13			3Q12			Variance
Net interest income	$	5,582		$	5,667		$	(85	)	$	5,582		$	5,317		$	265
Fee and other income	741			485			256			741			378			363
Net revenues	6,323			6,152			171			6,323			5,695			628
Investment gains, net	648			290			358			648			134			514
Net other-than-temporary impairments	(27		)	(6		)	(21		)	(27		)	(38		)	11
Fair value gains (losses), net	335			829			(494		)	335			(1,020		)	1,355
Administrative expenses	(646		)	(626		)	(20		)	(646		)	(588		)	(58		)
Credit-related income (expense)
Benefit (provision) for credit losses	2,609			5,383			(2,774		)	2,609			(2,079		)	4,688
Foreclosed property income	1,165			332			833			1,165			48			1,117
Total credit-related income (expense)	3,774			5,715			(1,941		)	3,774			(2,031		)	5,805
Other non-interest expenses	(308		)	(274		)	(34		)	(308		)	(339		)	31
Net gains (losses) and income (expenses)	3,776			5,928			(2,152		)	3,776			(3,882		)	7,658
Income before federal income taxes	10,099			12,080			(1,981		)	10,099			1,813			8,286
Provision for federal income taxes	(1,355		)	(1,985		)	630			(1,355		)	—			(1,355		)
Net income	8,744			10,095			(1,351		)	8,744			1,813			6,931
Less: Net (income) loss attributable to noncontrolling interest	(7		)	(11		)	4			(7		)	8			(15		)
Net income attributable to Fannie Mae	$	8,737		$	10,084		$	(1,347	)	$	8,737		$	1,821		$	6,916
Total comprehensive income attributable to Fannie Mae	$	8,603		$	10,250		$	(1,647	)	$	8,603		$	2,567		$	6,036
Preferred stock dividends	$	(8,617	)	$	(10,243	)	$	1,626		$	(8,617	)	$	(2,929	)	$	(5,688	)

Net revenues were $6.3 billion for the third quarter of 2013, compared with $6.2 billion for the second quarter of 2013. Net interest income was $5.6 billion, compared with $5.7 billion for the second quarter of 2013. The decrease in net interest income compared to the second quarter of 2013 was due to lower interest income from portfolio assets due to a decline in the company’s retained portfolio. As Fannie Mae reduces the size of its retained mortgage portfolio in compliance with the terms of the senior preferred stock purchase agreement, revenues generated by its retained mortgage portfolio assets also will decrease. As a result of both the shrinking of the company’s retained mortgage portfolio and the impact of guaranty fee increases, Fannie Mae expects that, in a number of years, guaranty fees will become its primary source of revenues.



Third Quarter 2013 Results		9

Credit-related income, which consists of recognition of a benefit for credit losses and foreclosed property income, was $3.8 billion in the third quarter of 2013, compared with $5.7 billion in the second quarter of 2013. Credit-related income in both the second and third quarters of 2013 was positively affected by an increase in home prices and a decline in the number of delinquent loans in the company’s single-family guaranty book of business during the quarters. Credit-related income in the third quarter of 2013 also benefited from the recognition of compensatory fees received in connection with the compensatory fee agreement with Bank of America entered into in January 2013. Credit-related income was higher in the second quarter of 2013 than in the third quarter of 2013 primarily due to updates made during the second quarter to the assumptions and data used to estimate the company’s allowance for loan losses for individually-impaired single-family loans to reflect faster prepayment and lower default expectations for those loans, which resulted in an incremental benefit for credit losses of $2.2 billion for the second quarter.

Credit losses, which the company defines as net charge-offs plus foreclosed property expense, excluding the effect of certain fair-value losses, were $1.1 billion in the third quarter of 2013, compared with $1.6 billion in the second quarter of 2013. The decrease was due primarily to an increase in foreclosed property income as a result of the recognition of compensatory fees received in connection with the compensatory fee agreement with Bank of America entered into in January 2013. Fannie Mae had previously deferred this income until the company substantially completed the loan review process related to the agreement.



Third Quarter 2013 Results		10

Total loss reserves, which reflect the company’s estimate of the probable losses the company has incurred in its guaranty book of business, including concessions it granted borrowers upon modification of their loans, were $48.4 billion as of September 30, 2013, compared with $53.1 billion as of June 30, 2013. The total loss reserves coverage to total nonperforming loans was 21 percent as of September 30, 2013, compared with 23 percent as of June 30, 2013.

Net fair value gains were $335 million in the third quarter of 2013, compared with $829 million in the second quarter of 2013. Third quarter fair value gains were driven primarily by gains on risk management derivatives as a result of an increase in longer-term interest rates. These gains were partially offset by fair value losses on commitments to sell mortgage-related securities. The estimated fair value of the company’s trading securities and derivatives may fluctuate substantially from period to period because of changes in interest rates, credit spreads, and interest rate volatility, as well as activity related to these financial instruments.



Third Quarter 2013 Results		11

BUSINESS SEGMENT RESULTS

The business groups running Fannie Mae’s three reporting segments – its Single-Family business, its Multifamily business, and its Capital Markets group – engage in complementary business activities in pursuing the company’s mission of providing liquidity, stability, and affordability to the U.S. housing market. The company’s Single-Family and Multifamily businesses work with Fannie Mae’s lender customers, who deliver mortgage loans that the company acquires and securitizes into Fannie Mae MBS. The Capital Markets group manages the company’s investment activity in mortgage-related assets and other interest-earning non-mortgage investments, funding investments in mortgage-related assets primarily with proceeds received from the issuance of Fannie Mae debt securities in the domestic and international capital markets. The Capital Markets group also provides liquidity to the mortgage market through short-term financing and other activities.

Single-Family business had net income of $4.7 billion in the third quarter of 2013, compared with $6.5 billion in the second quarter of 2013. The decrease in net income in the third quarter of 2013 compared with the second quarter of 2013 was due primarily to decreased credit-related income in the third quarter of 2013. The Single-Family guaranty book of business was $2.88 trillion as of September 30, 2013 and $2.84 trillion as of June 30, 2013. Single-Family guaranty fee income was $2.7 billion in the third quarter of 2013 and $2.5 billion in the second quarter of 2013.

Multifamily had net income of $478 million in the third quarter of 2013, compared with $386 million in the second quarter of 2013. The increase in net income in the third quarter of 2013 compared with the second quarter of 2013 was due primarily to increased credit-related income in the third quarter of 2013. Multifamily recorded credit-related income of $132 million in the third quarter of 2013, compared with credit-related income of $34 million in the second quarter of 2013 due primarily to improvements in default and loss severity trends, and improvements in property valuations. The Multifamily guaranty book of business was $203.7 billion as of September 30, 2013, compared with $205.5 billion as of June 30, 2013. Multifamily guaranty fee income was $311 million for the third quarter of 2013 and $300 million for the second quarter of 2013.



Third Quarter 2013 Results		12

Capital Markets group had net income of $3.8 billion in the third quarter of 2013, compared with $3.3 billion in the second quarter of 2013. The increase in net income in the third quarter of 2013 compared with the second quarter of 2013 was due primarily to increased investment gains partially offset by a decrease in fair value gains and net interest income in the third quarter of 2013. Investment gains for the third quarter of 2013 were $1.6 billion, compared with $898 million in the second quarter of 2013. Fair value gains for the third quarter of 2013 were $371 million, compared with $841 million in the second quarter of 2013. Capital Markets’ net interest income for the third quarter of 2013 was $2.3 billion, compared with $2.7 billion in the second quarter of 2013. The Capital Markets retained mortgage portfolio balance decreased to $516.3 billion as of September 30, 2013, compared with $565.2 billion as of June 30, 2013, resulting from purchases of $60.1 billion, liquidations of $30.1 billion, and sales of $79.0 billion during the quarter.



(Dollars in millions)	3Q13			2Q13			Variance			3Q13			3Q12			Variance
Single-Family Segment:
Guaranty fee income	$	2,719		$	2,544		$	175		$	2,719		$	2,014		$	705
Credit-related income (expense)	3,642			5,681			(2,039		)	3,642			(2,130		)	5,772
Other	(865		)	(677		)	(188		)	(865		)	(694		)	(171		)
Income (loss) before federal income taxes	5,496			7,548			(2,052		)	5,496			(810		)	6,306
Provision for federal income taxes	(751		)	(1,050		)	299			(751		)	(12		)	(739		)
Net income (loss)	$	4,745		$	6,498		$	(1,753	)	$	4,745		$	(822	)	$	5,567
Multifamily Segment:
Guaranty fee income	$	311		$	300		$	11		$	311		$	265		$	46
Credit-related income	132			34			98			132			99			33
Other	43			62			(19		)	43			31			12
Income before federal income taxes	486			396			90			486			395			91
(Provision) benefit for federal income taxes	(8		)	(10		)	2			(8		)	32			(40		)
Net income	$	478		$	386		$	92		$	478		$	427		$	51
Capital Markets Segment:
Net interest income	$	2,311		$	2,680		$	(369	)	$	2,311		$	3,247		$	(936	)
Investment gains, net	1,590			898			692			1,590			2,201			(611		)
Fair value gains (losses), net	371			841			(470		)	371			(961		)	1,332
Other	123			(179		)	302			123			(345		)	468
Income before federal income taxes	4,395			4,240			155			4,395			4,142			253
Provision for federal income taxes	(596		)	(925		)	329			(596		)	(20		)	(576		)
Net income	$	3,799		$	3,315		$	484		$	3,799		$	4,122		$	(323	)



Third Quarter 2013 Results		13

ANNEX I

FANNIE MAE

(In conservatorship)

Condensed Consolidated Balance Sheets — (Unaudited)

(Dollars in millions, except share amounts)



	As of
	September 30, 2013				December 31, 2012
ASSETS
Cash and cash equivalents		$	30,784			$	21,117
Restricted cash (includes $26,804 and $61,976, respectively, related to consolidated trusts)		31,525				67,919
Federal funds sold and securities purchased under agreements to resell or similar arrangements		40,300				32,500
Investments in securities:
Trading, at fair value		32,860				40,695
Available-for-sale, at fair value (includes $911 and $935, respectively, related to consolidated trusts)		41,000				63,181
Total investments in securities		73,860				103,876
Mortgage loans:
Loans held for sale, at lower of cost or fair value (includes $41 and $72, respectively, related to consolidated trusts)		998				464
Loans held for investment, at amortized cost:
Of Fannie Mae		313,267				355,544
Of consolidated trusts (includes $13,877 and $10,800, respectively, at fair value and loans pledged as collateral that may be sold or repledged of $477 and $943, respectively)		2,744,084				2,652,193
Total loans held for investment		3,057,351				3,007,737
Allowance for loan losses		(45,169		)		(58,795		)
Total loans held for investment, net of allowance		3,012,182				2,948,942
Total mortgage loans		3,013,180				2,949,406
Accrued interest receivable, net (includes $7,568 and $7,567, respectively, related to consolidated trusts)		8,696				9,176
Acquired property, net		11,380				10,489
Deferred tax asset, net		48,256				—
Other assets (includes cash pledged as collateral of $2,635 and $1,222, respectively)		23,241				27,939
Total assets		$	3,281,222			$	3,222,422
LIABILITIES AND EQUITY
Liabilities:
Accrued interest payable (includes $8,234 and $8,645, respectively, related to consolidated trusts)		$	10,769			$	11,303
Debt:
Of Fannie Mae (includes $684 and $793, respectively, at fair value)		565,110				615,864
Of consolidated trusts (includes $14,414 and $11,647, respectively, at fair value)		2,675,011				2,573,653
Other liabilities (includes $501 and $1,059, respectively, related to consolidated trusts)		18,715				14,378
Total liabilities		$	3,269,605			$	3,215,198
Commitments and contingencies (Note 17)		—				—
Fannie Mae stockholders’ equity:
Senior preferred stock, 1,000,000 shares issued and outstanding		117,149				117,149
Preferred stock, 700,000,000 shares are authorized—555,374,922 shares issued and outstanding, respectively		19,130				19,130
Common stock, no par value, no maximum authorization—1,308,762,703 shares issued, respectively, 1,158,080,657 and 1,158,077,970 shares outstanding, respectively		687				687
Accumulated deficit		(119,067		)		(122,766		)
Accumulated other comprehensive income		1,070				384
Treasury stock, at cost, 150,682,046 and 150,684,733 shares, respectively		(7,401		)		(7,401		)
Total Fannie Mae stockholders’ equity		11,568				7,183
Noncontrolling interest		49				41
Total equity (See Note 1: Impact of U.S. Government Support and Earnings (Loss) per Share for information on our dividend obligation to Treasury)		11,617				7,224
Total liabilities and equity		$	3,281,222			$	3,222,422

See Notes to Condensed Consolidated Financial Statements



Third Quarter 2013 Results		14

FANNIE MAE

(In conservatorship)

Condensed Consolidated Statements of Operations and Comprehensive Income — (Unaudited)

(Dollars and shares in millions, except per share amounts)



	For the Three							For the Nine
	Months Ended							Months Ended
	September 30,							September 30,
	2013				2012			2013			2012
Interest income:
Trading securities		$	185		$	234		$	633		$	756
Available-for-sale securities		546			789			1,870			2,551
Mortgage loans (includes $25,351 and $27,057, respectively, for the three months ended and $75,592 and $84,482, respectively, for the nine months ended related to consolidated trusts)		28,299			30,593			85,579			95,186
Other		37			53			143			131
Total interest income		29,067			31,669			88,225			98,624
Interest expense:
Short-term debt		29			38			109			112
Long-term debt (includes $20,905 and $23,395, respectively, for the three months ended and $62,785 and $73,469, respectively, for the nine months ended related to consolidated trusts)		23,456			26,314			70,563			82,570
Total interest expense		23,485			26,352			70,672			82,682
Net interest income		5,582			5,317			17,553			15,942
Benefit (provision) for credit losses		2,609			(2,079		)	8,949			(1,038		)
Net interest income after benefit (provision) for credit losses		8,191			3,238			26,502			14,904
Investment gains, net		648			134			1,056			381
Net other-than-temporary impairments		(27		)	(38		)	(42		)	(701		)
Fair value gains (losses), net		335			(1,020		)	1,998			(3,186		)
Debt extinguishment gains (losses), net		92			(54		)	96			(181		)
Fee and other income		741			378			1,794			1,148
Non-interest income (loss)		1,789			(600		)	4,902			(2,539		)
Administrative expenses:
Salaries and employee benefits		307			294			928			892
Professional services		236			195			678			542
Occupancy expenses		48			48			141			139
Other administrative expenses		55			51			166			146
Total administrative expenses		646			588			1,913			1,719
Foreclosed property (income) expense		(1,165		)	(48		)	(1,757		)	221
Other expenses		400			285			955			775
Total other (income) expenses		(119		)	825			1,111			2,715
Income before federal income taxes		10,099			1,813			30,293			9,650
(Provision) benefit for federal income taxes		(1,355		)	—			47,231			—
Net income		8,744			1,813			77,524			9,650
Other comprehensive (loss) income:
Changes in unrealized gains on available-for-sale securities, net of reclassification adjustments and taxes		(133		)	741			532			1,416
Other		(1		)	5			154			20
Total other comprehensive (loss) income		(134		)	746			686			1,436
Total comprehensive income		8,610			2,559			78,210			11,086
Less: Comprehensive (income) loss attributable to noncontrolling interest		(7		)	8			(18		)	4
Total comprehensive income attributable to Fannie Mae		$	8,603		$	2,567		$	78,192		$	11,090
Net income		8,744			1,813			77,524			9,650
Less: Net (income) loss attributable to noncontrolling interest		(7		)	8			(18		)	4
Net income attributable to Fannie Mae		8,737			1,821			77,506			9,654
Dividends distributed or available for distribution to senior preferred stockholder		(8,617		)	(2,929		)	(78,228		)	(8,675		)
Net income (loss) attributable to common stockholders (Note 11)		$	120		$	(1,108	)	$	(722	)	$	979
Earnings (loss) per share:
Basic		$	0.02		$	(0.19	)	$	(0.13	)	$	0.17
Diluted		0.02			(0.19		)	(0.13		)	0.17
Weighted-average common shares outstanding:
Basic		5,762			5,762			5,762			5,762
Diluted		5,893			5,762			5,762			5,893

See Notes to Condensed Consolidated Financial Statements



Third Quarter 2013 Results		15

FANNIE MAE

(In conservatorship)

Condensed Consolidated Statements of Cash Flows— (Unaudited)

(Dollars in millions)



	For the Nine Months Ended September 30,
	2013			2012
Net cash provided by operating activities	$	11,518		$	32,279
Cash flows provided by investing activities:
Purchases of trading securities held for investment	(5,855		)	(1,542		)
Proceeds from maturities and paydowns of trading securities held for investment	2,036			2,671
Proceeds from sales of trading securities held for investment	11,118			1,357
Purchases of available-for-sale securities	—			(34		)
Proceeds from maturities and paydowns of available-for-sale securities	8,265			9,423
Proceeds from sales of available-for-sale securities	14,312			923
Purchases of loans held for investment	(161,737		)	(141,539		)
Proceeds from repayments and sales of loans acquired as held for investment of Fannie Mae	38,427			22,540
Proceeds from repayments of loans acquired as held for investment of consolidated trusts	532,411			568,881
Net change in restricted cash	36,394			(9,147		)
Advances to lenders	(114,584		)	(97,508		)
Proceeds from disposition of acquired property and preforeclosure sales	29,688			29,822
Net change in federal funds sold and securities purchased under agreements to resell or similar arrangements	(7,800		)	500
Other, net	619			56
Net cash provided by investing activities	383,294			386,403
Cash flows used in financing activities:
Proceeds from issuance of debt of Fannie Mae	326,036			550,087
Payments to redeem debt of Fannie Mae	(377,514		)	(630,546		)
Proceeds from issuance of debt of consolidated trusts	339,687			270,552
Payments to redeem debt of consolidated trusts	(599,519		)	(601,523		)
Payments of cash dividends on senior preferred stock to Treasury	(73,835		)	(8,679		)
Proceeds from senior preferred stock purchase agreement with Treasury	—			4,571
Other, net	—			(9		)
Net cash used in financing activities	(385,145		)	(415,547		)
Net increase in cash and cash equivalents	9,667			3,135
Cash and cash equivalents at beginning of period	21,117			17,539
Cash and cash equivalents at end of period	$	30,784		$	20,674
Cash paid during the period for:
Interest	$	82,086		$	90,338
Income Taxes	$	1,876		$	—

See Notes to Condensed Consolidated Financial Statements



Third Quarter 2013 Results		16

ex992q32013creditsupplem

November 7, 2013 Fannie Mae 2013 Third Quarter Credit Supplement Exhibit 99.2

1  This presentation includes information about Fannie Mae, including information contained in Fannie Mae’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, the “2013 Q3 Form 10-Q.” Some of the terms used in these materials are defined and discussed more fully in the 2013 Q3 Form 10-Q and in Fannie Mae’s Form 10-K for the year ended December 31, 2012, the “2012 Form 10-K.” These materials should be reviewed together with the 2013 Q3 Form 10-Q, and the 2012 Form 10-K, copies of which are available on the “SEC Filings” page in the “Investor Relations” section of Fannie Mae’s web site at www.fanniemae.com.  Some of the information in this presentation is based upon information that we received from third-party sources such as sellers and servicers of mortgage loans. Although we generally consider this information reliable, we do not independently verify all reported information.  Due to rounding, amounts reported in this presentation may not add to totals indicated (or 100%). A zero indicates less than one half of one percent. A dash indicates a null value.  Unless otherwise indicated, data labeled as “YTD 2013” is as of September 30, 2013 or for the first nine months of 2013.

2 Home Prices Home Price Growth/Decline Rates in the U.S. 3 One Year Home Price Change as of 2013 Q3 4 Home Price Change Peak-to-Current as of 2013 Q3 5 Credit Profile of Fannie Mae Single-Family Loans Credit Characteristics of Single-Family Business Acquisitions 6 Credit Characteristics of Single-Family Business Acquisitions under the Refi Plus™ Initiative 7 Credit Characteristics of Single-Family Conventional Guaranty Book of Business by Key Product Features 8 Credit Characteristics of Single-Family Conventional Guaranty Book of Business by Origination Year 9 Credit Characteristics of Single-Family Conventional Guaranty Book of Business by Select States 10 Credit Characteristics of Alt-A Loans in the Single-Family Conventional Guaranty Book of Business 11 Credit Characteristics of Refi Plus Loans in the Single-Family Conventional Guaranty Book of Business 12 Serious Delinquency Rates by Select States and Region of Single-Family Conventional Guaranty Book of Business 13 Workouts of Fannie Mae Single-Family Loans Single-Family Completed Workouts by Type 14 Re-performance Rates of Modified Single-Family Loans 15 Additional Credit Information for Fannie Mae Single-Family Loans Cumulative Default Rates of Single-Family Conventional Guaranty Book of Business by Origination Year 16 Single-Family Real Estate Owned (REO) in Select States 17 Single-Family Short Sales and REO Sales Price / UPB of Mortgage Loans 18 Credit Profile of Fannie Mae Multifamily Loans Multifamily Credit Profile by Loan Attributes 19 Multifamily Credit Profile by Acquisition Year 20 Multifamily Credit Profile 21 Multifamily YTD 2013 Credit Losses by State 22 Table of Contents

3 10.6% 10.7% 14.6% 14.7% -0.3% -8.4% -18.4% -2.5% -3.8% -3.7% 7.3% 1.2%**. 14.6 14.7% -0.3% -8.4% -18.4% -2.5% -3.8% -3.7% 7.2% 8.3%** 7.5% 7.6% 10.6% 11.3% 2.7% -3.5% -9.1% -4.8% -4.3% -3.6% 4.2% 9.2% -15% -10% -5% 0% 5% 10% 15% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Home Price Growth/Decline Rates in the U.S. Fannie Mae Home Price Index Growth rates are from period-end to period-end. *Year-to-date as of Q3-2013. Estimate based on purchase transactions in Fannie-Freddie acquisition and public deed data available through the end of September 2013. Including subsequent data may lead to materially different results. **Year-to-date as of Q2-2013. As comparison, Fannie Mae’s index for the same period is 6.5%. S&P/Case-Shiller Index * Based on our home price index, we estimate that home prices on a national basis increased by 9.2% in the first nine months of 2013 and by 9.4% from the third quarter of 2012 to the third quarter of 2013. Despite the recent increases in home prices, we estimate that, through the third quarter of 2013, home prices on a national basis remained 13.2% below their peak in the third quarter of 2006. 0 7 14.6% 14.7% -0.3% -8.4% -18.4% -2.5% -3.8% -3.7% 7.2% 8.3% **

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to 5% 5% to 10% 10% and above State Growth Rate One Year Home Price Change as of 2013 Q3* United States 9.4% *Source: Fannie Mae. Estimates based on purchase transactions in Fannie-Freddie acquisition and public deed data available through the end of September 2013. Including subsequent data may lead to materially different results. State: NM Growth Rate: 3.8% UPB %: 0.5% Example

5 H I - 1 3 . 1 % 0 . 8 % T X 0 . 0 % 5 . 4 % M T - 1 . 3 % 0 . 3 % C O 0 . 0 % 2 . 6 % N M - 1 1 . 7 % 0 . 5 % K S 0 . 0 % 0 . 5 % W Y - 1 .4 % 0 . 2 % S D 0 . 0 % 0 . 2 % N D 0 . 0 % 0 . 1 % OK 0 . 0 % 0 . 6 % N E - 0 . 8 % 0 . 4 %U T - 1 1 . 2 % 1 . 0 % M O - 7 . 0 % 1 . 3 % M N - 1 2 . 6 % 1 . 9 % I A 0 . 0 % 0 . 7 % W I - 8 . 4 % 1 . 8 % A R - 2 . 2 % 0 . 5 % A L - 8 . 2 % 1 . 0 % P A - 2 . 9 % 3 . 1 %O H - 8 . 4 % 2 . 1 % L A 0 . 0 % 0 . 9 % N C - 7 . 9 % 2 . 5 % K Y 0 . 0 % 0 . 6 % M S - 7 . 7 % 0 . 4 % N Y - 7 . 1 % 5 . 6 % T N - 4 . 9 % 1 . 3 % I N - 0 . 9 % 1 . 2 % V A - 1 4 . 4 % 3 . 6 % S C - 9 . 7 % 1 . 2 % M E - 1 0 . 3 % 0 . 3 % W V - 1 . 0 % 0 . 2 % V T - 6 . 5 % 0 . 2 % M D - 2 2 . 4 % 2 . 8 % N H - 1 6 . 3 % 0 . 5 % M A - 1 2 . 4 % 3 . 1 % N J - 2 2 . 6 % 4 . 0 % C T - 1 7 . 4 % 1 . 4 % D E - 1 7 . 8 % 0 . 4 % R I - 2 8 . 0 % 0 . 3 % D C 0 . 0 % 0 . 4 % C A - 2 9 . 9 % 1 9 . 5 % A Z - 3 4 . 5 % 2 . 4 % N V - 4 5 . 7 % 1 . 0 % O R - 1 7 . 2 % 1 . 7 % ID - 1 6 . 6 % 0 . 5 % WA - 1 7 . 4 % 3 . 5 % G A - 1 8 . 2 % 2 . 7 % I L - 1 8 . 3 % 4 . 2 % F L - 4 0 . 1 % 5 . 7 % M I - 2 0 . 5 % 2 . 4 % A K 0 . 0 % 0 . 2 % Home Price Change Peak-to-Current as of 2013 Q3* United States -13.2% *Source: Fannie Mae. Estimates based on purchase transactions in Fannie-Freddie acquisition and public deed data available through the end of September 2013. Including subsequent data may lead to materially different results. Below -30% -30% to -15% -15% to -5% -5% to 0% 0% State Growth Rate Note: Date of peak is determined for each state individually. States currently at peak prices show 0.0% change. State: NM Growth Rate: -11.7% UPB %: 0.5% Example

6 Acquisition Year YTD 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Unpaid Principal Balance (billions) $612.7 $832.2 $562.3 $595.0 $684.7 $557.2 $643.8 $515.8 $524.2 $568.8 Weighted Average Origination Note Rate 3.66% 3.78% 4.35% 4.64% 4.93% 6.00% 6.51% 6.45% 5.73% 5.63% Origination Loan-to-Value Ratio <= 60% 22.9% 25.3% 29.1% 30.3% 32.6% 22.7% 16.7% 18.6% 21.4% 23.1% >60% and <= 70% 14.3% 14.4% 15.5% 15.9% 17.0% 16.1% 13.5% 15.1% 16.3% 16.2% >70% and <= 80% 34.3% 34.4% 37.3% 38.5% 39.9% 39.5% 44.7% 49.6% 46.2% 43.1% >80% and <= 90% 10.2% 9.1% 8.9% 8.6% 6.9% 11.7% 9.1% 6.8% 7.4% 8.2% >90% and <= 100% (2) 10.7% 8.4% 6.8% 5.2% 3.3% 10.0% 15.8% 9.7% 8.5% 9.3% > 100% (2) 7.6% 8.3% 2.3% 1.6% 0.4% 0.1% 0.1% 0.2% 0.2% 0.2% Weighted Average Origination Loan-to-Value Ratio 75.4% 74.5% 69.3% 68.4% 66.8% 72.0% 75.5% 73.4% 72.0% 71.4% Weighted Average Origination Loan-to-Value Ratio Excluding HARP (3) 69.5% 67.8% 66.6% 65.8% 65.8%      FICO Credit Scores (4) 0 to < 620 1.3% 0.8% 0.5% 0.4% 0.4% 2.8% 6.4% 6.2% 5.4% 5.6% >= 620 and < 660 3.2% 2.2% 1.8% 1.6% 1.5% 5.7% 11.5% 11.2% 10.7% 11.5% >=660 and < 700 9.1% 7.2% 7.0% 6.6% 6.5% 13.9% 19.2% 19.6% 18.9% 19.4% >=700 and < 740 17.7% 15.6% 16.2% 16.1% 17.2% 21.7% 22.6% 23.0% 23.2% 23.9% >=740 68.6% 74.1% 74.5% 75.1% 74.4% 55.8% 40.1% 39.7% 41.5% 39.2% Missing 0.0% 0.0% 0.1% 0.1% 0.1% 0.1% 0.1% 0.2% 0.3% 0.4% Weighted Average FICO Credit Score 754 761 762 762 761 738 716 716 719 715 Product Distribution Fixed-rate 97.7% 96.7% 93.5% 93.7% 96.6% 91.7% 90.1% 83.4% 78.7% 78.8% Adjustable-rate 2.3% 3.3% 6.5% 6.3% 3.4% 8.3% 9.9% 16.6% 21.3% 21.2% Alt-A (5) 1.3% 0.8% 1.2% 0.9% 0.2% 3.1% 16.7% 21.8% 16.1% 11.9% Subprime      0.3% 0.7% 0.7% 0.0%  Interest Only 0.2% 0.3% 0.7% 1.3% 1.0% 5.6% 15.2% 15.2% 10.1% 5.0% Negative Amortizing      0.0% 0.3% 3.1% 3.2% 1.9% Investor 9.1% 7.2% 6.5% 4.6% 2.5% 5.6% 6.5% 7.0% 6.4% 5.4% Condo/Co-op 10.3% 9.1% 8.8% 8.6% 8.2% 10.3% 10.4% 10.5% 9.8% 8.8% Refinance 73.7% 79.4% 76.5% 77.4% 79.9% 58.6% 50.4% 48.3% 53.1% 57.3% Total Refi Plus Initiative (3) 23.3% 24.5% 24.3% 23.4% 10.6%      HARP 14.3% 15.6% 9.9% 9.8% 4.1%      Origination Loan-to-Value Ratio: >80% and <=105% 57.2% 57.2% 88.1% 94.4% 99.1%      >105% and <=125% 21.8% 22.1% 11.9% 5.6% 0.9%      >125% 21.0% 20.7%         HARP Weighted Average Origination Loan-to-Value Ratio 110.5% 111.0% 94.3% 92.2% 90.7%      Credit Characteristics of Single-Family Business Acquisitions(1) (1) Percentage calculated based on unpaid principal balance of loans at time of acquisition. Single-family business acquisitions refer to single-family mortgage loans we acquire through purchase or securitization transactions. (2) The increase after 2009 is the result of the Home Affordable Refinance Program (“HARP”), which involves the refinance of existing Fannie Mae loans with high loan-to-value ratios, including loans with loan-to-value ratios in excess of 100%. (3) Our Refi Plus initiative, which includes HARP, started in April 2009. Our Refi Plus initiative provides expanded refinance opportunities for eligible Fannie Mae borrowers. (4) FICO credit scores as reported by the seller of the mortgage loan at the time of delivery. (5) Newly originated Alt-A loans acquired after 2008 consist of the refinance of existing loans under our Refi Plus initiative.

7 YTD 2013 2012 2011 2010 2009 YTD 2013 2012 2011 2010 2009 Unpaid Principal Balance (billions) $87.6 $129.9 $55.6 $59.0 $27.9 $55.4 $73.8 $81.2 $80.5 $44.7 Weighted Average Origination Note Rate 3.96% 4.14% 4.78% 5.00% 5.05% 3.70% 3.89% 4.44% 4.68% 4.85% Origination Loan-to-Value Ratio <= 80%      100.00% 100.00% 100.00% 100.00% 100.00% >80% and <= 105% 57.2% 57.2% 88.1% 94.4% 99.1%      >105% and <= 125% 21.8% 22.1% 11.9% 5.6% 0.9%      >125% 21.0% 20.7%         Weighted Average Origination Loan-to-Value Ratio 110.5% 111.0% 94.3% 92.2% 90.7% 60.1% 61.1% 60.2% 62.3% 63.3% FICO Credit Scores (2) 0 to < 620 6.3% 3.7% 2.1% 2.0% 1.2% 4.9% 2.9% 1.7% 1.4% 0.8% >= 620 and < 660 9.1% 6.0% 3.8% 3.6% 2.5% 6.4% 4.2% 2.8% 2.4% 1.7% >=660 and < 700 17.2% 13.4% 11.6% 11.6% 9.6% 12.9% 9.8% 8.8% 8.0% 6.7% >=700 and < 740 21.3% 20.3% 21.0% 21.4% 22.3% 18.2% 16.2% 16.7% 15.9% 16.3% >=740 46.2% 56.6% 61.5% 61.2% 64.4% 57.5% 66.9% 70.0% 72.3% 74.5% Weighted Average FICO Credit Score 724 738 746 746 749 739 753 758 760 762 Product Distribution Fixed-rate 99.6% 99.3% 96.8% 97.2% 97.9% 99.4% 98.9% 97.6% 97.3% 98.1% Adjustable-rate 0.4% 0.7% 3.2% 2.8% 2.1% 0.6% 1.1% 2.4% 2.7% 1.9% Owner Occupied 78.8% 85.7% 86.3% 91.1% 95.2% 82.2% 87.2% 89.2% 91.8% 93.5% Second/Vacation Home 3.1% 2.8% 3.6% 3.5% 3.3% 3.5% 3.2% 3.6% 3.5% 4.2% Investor 18.0% 11.5% 10.1% 5.4% 1.6% 14.3% 9.6% 7.3% 4.7% 2.3% Condo/Co-op 13.2% 10.9% 10.5% 10.1% 8.3% 9.3% 7.6% 5.8% 6.0% 6.8% Acquisition Year HARP (1) Other Refi Plus (1) Credit Characteristics of Single-Family Business Acquisitions under the Refi Plus Initiative (1) Our Refi Plus initiative, under which we acquire HARP loans, started in April 2009. HARP loans have LTV ratios at origination in excess of 80%, while Other Refi Plus loans have LTV ratios at origination of up to 80%. (2) FICO credit scores as reported by the seller of the mortgage loan at the time of delivery.

8 As of September 30, 2013 Negative Amortizing Loans Interest Only Loans Loans with FICO < 620 (3) Loans with FICO ≥ 620 and < 660 (3) Loans with Origination LTV Ratio > 90% Loans with FICO < 620 and Origination LTV Ratio > 90% (3) Alt-A Loans Subprime Loans Subtotal of Key Product Features (1) Overall Book Unpaid Principal Balance (billions) (2) $6.6 $84.4 $75.4 $156.0 $414.0 $21.0 $136.0 $4.3 $736.5 $2,807.2 Share of Single-Family Conventional Guaranty Book 0.2% 3.0% 2.7% 5.6% 14.7% 0.7% 4.8% 0.2% 26.2% 100.0% Average Unpaid Principal Balance (2) $101,406 $235,375 $119,591 $131,064 $171,322 $130,506 $152,930 $142,712 $155,744 $160,089 Serious Delinquency Rate 5.33% 12.43% 10.26% 7.65% 3.74% 11.37% 9.70% 17.42% 6.06% 2.55% Origination Years 2005-2008 54.5% 78.9% 47.5% 41.9% 15.8% 38.7% 62.1% 85.3% 32.9% 15.8% Weighted Average Origination Loan-to-Value Ratio 70.5% 74.0% 80.5% 79.2% 105.3% 106.4% 76.9% 76.8% 90.3% 73.9% Origination Loan-to-Value Ratio > 90% 0.3% 8.0% 27.8% 23.3% 100.0% 100.0% 12.7% 6.5% 56.2% 14.7% Weighted Average Mark-to-Market Loan-to-Value Ratio 72.8% 93.3% 80.3% 77.9% 96.1% 103.8% 84.3% 95.3% 86.9% 67.1% Mark-to-Market Loan-to-Value Ratio > 100% and <= 125% 15.6% 23.5% 14.3% 12.5% 19.1% 28.7% 17.3% 22.3% 15.9% 5.2% Mark-to-Market Loan-to-Value Ratio > 125% 13.9% 15.1% 7.8% 6.9% 9.5% 18.0% 11.0% 16.6% 8.0% 2.5% Weighted Average FICO (3) 707 724 585 642 727 585 714 618 703 744 FICO < 620 (3) 6.7% 1.5% 100.0%  5.1% 100.0% 1.8% 51.4% 10.2% 2.7% Fixed-rate 3.5% 24.9% 81.2% 83.2% 93.8% 84.9% 65.3% 63.1% 82.1% 91.2% Primary Residence 68.7% 85.1% 95.4% 93.2% 91.0% 95.6% 76.9% 96.9% 89.2% 88.3% Condo/Co-op 12.9% 15.3% 4.8% 6.3% 10.5% 5.9% 10.1% 4.0% 9.6% 9.4% Credit Enhanced (4) 46.8% 14.4% 25.5% 22.7% 56.9% 63.3% 13.4% 56.2% 36.3% 14.8% % of 2009 Credit Losses (5) 2.0% 32.6% 8.8% 15.5% 19.2% 3.4% 39.6% 1.5% 75.0% 100.0% % of 2010 Credit Losses (5) 1.9% 28.6% 8.0% 15.1% 15.9% 2.7% 33.2% 1.1% 68.4% 100.0% % of 2011 Credit Losses (5) 1.2% 25.8% 7.9% 14.7% 14.0% 2.2% 27.3% 0.6% 63.4% 100.0% % of 2012 Credit Losses (5) 0.5% 21.8% 7.8% 14.2% 16.8% 2.3% 23.7% 1.1% 61.2% 100.0% % of YTD 2013 Credit Losses (5) 0.5% 20.1% 6.8% 15.8% 19.6% 1.9% 27.0% 0.3% 64.0% 100.0% Categories Not Mutually Exclusive (1) (1) Loans with multiple product features are included in all applicable categories. The subtotal is calculated by counting a loan only once even if it is included in multiple categories. (2) Excludes non-Fannie Mae securities held in portfolio and those Alt-A and subprime wraps for which Fannie Mae does not have loan-level information. Fannie Mae had access to detailed loan-level information for approximately 99% of its single-family conventional guaranty book of business as of September 30, 2013. (3) FICO credit scores as reported by the seller of the mortgage loan at the time of delivery. (4) Unpaid principal balance of all loans with credit enhancement as a percentage of unpaid principal balance of single-family conventional guaranty book of business for which Fannie Mae had access to loan level information. Includes primary mortgage insurance, pool insurance, lender recourse and other credit enhancement. (5) Expressed as a percentage of credit losses for the single-family guaranty book of business. Does not reflect the impact of recoveries that have not been allocated to specific loans. For information on total credit losses, refer to Fannie Mae’s 2013 Q3 Form 10-Q. Credit Characteristics of Single-Family Conventional Guaranty Book of Business by Key Product Features

9 As of September 30, 2013 Overall Book 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 and Earlier Unpaid Principal Balance (billions) (1) $2,807.2 $503.6 $743.1 $332.0 $291.9 $219.3 $86.4 $146.1 $105.1 $105.8 $273.8 Share of Single-Family Conventional Guaranty Book 100.0% 17.9% 26.5% 11.8% 10.4% 7.8% 3.1% 5.2% 3.7% 3.8% 9.8% Average Unpaid Principal Balance (1) $160,089 $202,451 $201,277 $173,541 $172,457 $166,194 $153,596 $163,910 $148,729 $131,056 $79,083 Serious Delinquency Rate 2.55% 0.02% 0.13% 0.32% 0.55% 0.98% 6.78% 12.48% 11.60% 7.51% 3.54% Weighted Average Origination Loan-to-Value Ratio 73.9% 75.8% 75.9% 71.3% 71.2% 69.8% 74.8% 78.3% 75.3% 73.5% 71.6% Origination Loan-to-Value Ratio > 90% (2) 14.7% 19.0% 18.6% 12.6% 10.3% 6.6% 12.7% 21.0% 12.6% 9.8% 10.4% Weighted Average Mark-to-Market Loan-to-Value Ratio 67.1% 71.2% 65.0% 59.8% 61.1% 63.0% 77.9% 94.9% 92.8% 78.9% 51.4% Mark-to-Market Loan-to-Value Ratio > 100% and <= 125% 5.2% 4.0% 3.7% 0.8% 1.2% 1.4% 12.2% 23.8% 21.7% 13.4% 2.3% Mark-to-Market Loan-to-Value Ratio > 125% 2.5% 2.1% 1.6% 0.0% 0.1% 0.1% 3.0% 13.9% 14.1% 6.0% 0.8% Weighted Average FICO (3) 744 753 759 758 758 754 718 695 699 708 710 FICO < 620 (3) 2.7% 1.4% 1.0% 0.7% 0.7% 0.7% 5.2% 10.6% 8.5% 6.5% 7.1% Interest Only 3.0% 0.2% 0.3% 0.6% 1.0% 1.1% 7.4% 17.8% 19.7% 12.8% 2.7% Negative Amortizing 0.2%       0.1% 1.5% 1.8% 1.1% Fixed-rate 91.2% 97.8% 97.3% 94.3% 95.2% 97.1% 78.7% 68.8% 67.6% 71.1% 83.0% Primary Residence 88.3% 86.7% 88.6% 87.2% 89.3% 90.8% 86.8% 88.9% 86.8% 86.5% 90.0% Condo/Co-op 9.4% 10.3% 9.2% 8.9% 8.7% 9.1% 11.4% 10.2% 11.0% 11.0% 8.0% Credit Enhanced (4) 14.8% 18.7% 15.2% 10.4% 7.5% 7.1% 26.5% 31.1% 20.5% 15.5% 11.5% % of 2009 Credit Losses (5) 100.0%      4.8% 36.0% 30.9% 16.4% 11.9% % of 2010 Credit Losses (5) 100.0%     0.4% 7.0% 35.8% 29.2% 15.9% 11.7% % of 2011 Credit Losses (5) 100.0%    0.7% 1.6% 5.7% 30.3% 27.7% 19.2% 14.8% % of 2012 Credit Losses (5) 100.0%  0.1% 0.6% 1.9% 2.5% 7.7% 31.5% 26.3% 16.3% 13.1% % of YTD 2013 Credit Losses (5) 100.0% 0.0% 1.4% 1.5% 2.7% 2.9% 6.9% 31.5% 25.4% 15.6% 12.0% Cumulative Default Rate (6)  0.0% 0.0% 0.1% 0.3% 0.5% 3.9% 12.4% 11.3% 6.8%  Origination Year Credit Characteristics of Single-Family Conventional Guaranty Book of Business by Origination Year (1) Excludes non-Fannie Mae securities held in portfolio and those Alt-A and subprime wraps for which Fannie Mae does not have loan-level information. Fannie Mae had access to detailed loan-level information for approximately 99% of its single-family conventional guaranty book of business as of September 30, 2013. (2) The increase after 2009 is the result of the Home Affordable Refinance Program (“HARP”), which involves the refinance of existing Fannie Mae loans with high loan-to-value ratios, including loans with loan-to-value ratios in excess of 100%. (3) FICO credit scores as reported by the seller of the mortgage loan at the time of delivery. (4) Unpaid principal balance of all loans with credit enhancement as a percentage of unpaid principal balance of single-family conventional guaranty book of business for which Fannie Mae has access to loan-level information. Includes primary mortgage insurance, pool insurance, lender recourse and other credit enhancement. (5) Expressed as a percentage of credit losses for the single-family guaranty book of business. Does not reflect the impact of recoveries that have not been allocated to specific loans. For information on total credit losses, refer to Fannie Mae’s 2013 Q3 Form 10-Q. (6) Defaults include loan liquidations other than through voluntary pay-off or repurchase by lenders and include loan foreclosures, short sales, sales to third parties and deeds in lieu of foreclosure. Cumulative Default Rate is the total number of single-family conventional loans in the guaranty book of business originated in the identified year that have defaulted, divided by the total number of single-family conventional loans in the guaranty book of business originated in the identified year. For 2003 and 2004 cumulative default rates, refer to slide 16.

10 As of September 30, 2013 Overall Book AZ CA FL NV Select Midwest States (1) Unpaid Principal Balance (billions) (2) $2,807.2 $67.4 $546.4 $161.1 $26.9 $277.0 Share of Single-Family Conventional Guaranty Book 100.0% 2.4% 19.5% 5.7% 1.0% 9.9% Average Unpaid Principal Balance (2) $160,089 $149,641 $226,287 $138,783 $155,018 $124,166 Serious Delinquency Rate 2.55% 1.26% 1.13% 7.60% 4.70% 2.64% Origination Years 2005-2008 15.8% 19.6% 12.3% 31.8% 27.2% 15.1% Weighted Average Origination Loan-to-Value Ratio 73.9% 83.0% 68.5% 80.6% 88.5% 78.2% Origination Loan-to-Value Ratio > 90% 14.7% 25.3% 10.0% 21.6% 26.9% 20.0% Weighted Average Mark-to-Market Loan-to-Value Ratio 67.1% 74.2% 58.9% 82.3% 89.7% 73.8% Mark-to-Market Loan-to-Value Ratio >100% and <=125% 5.2% 11.4% 4.3% 14.1% 15.1% 7.3% Mark-to-Market Loan-to-Value Ratio >125% 2.5% 5.4% 2.3% 13.1% 19.8% 3.6% Weighted Average FICO (3) 744 745 753 730 739 739 FICO < 620 (3) 2.7% 2.3% 1.5% 4.5% 2.5% 3.5% Interest Only 3.0% 5.5% 4.3% 6.1% 8.8% 1.9% Negative Amortizing 0.2% 0.3% 0.7% 0.6% 0.8% 0.1% Fixed-rate 91.2% 87.8% 89.7% 85.5% 82.5% 90.8% Primary Residence 88.3% 79.1% 85.1% 81.4% 75.7% 92.6% Condo/Co-op 9.4% 4.2% 12.5% 13.4% 5.3% 11.4% Credit Enhanced (4) 14.8% 14.6% 7.3% 14.2% 13.7% 18.7% % of 2009 Credit Losses (5) 100.0% 10.8% 24.4% 15.5% 6.5% 14.8% % of 2010 Credit Losses (5) 100.0% 10.0% 22.6% 17.5% 6.1% 13.6% % of 2011 Credit Losses (5) 100.0% 11.7% 27.0% 11.0% 7.9% 12.0% % of 2012 Credit Losses (5) 100.0% 6.3% 18.4% 21.4% 4.8% 18.7% % of YTD 2013 Credit Losses (5) 100.0% 1.8% 6.3% 29.4% 4.2% 21.4% Credit Characteristics of Single-Family Conventional Guaranty Book of Business by Select States (1) Select Midwest states are Illinois, Indiana, Michigan, and Ohio. (2) Excludes non-Fannie Mae securities held in portfolio and those Alt-A and subprime wraps for which Fannie Mae does not have loan-level information. Fannie Mae had access to detailed loan-level information for approximately 99% of its single-family conventional guaranty book of business as of September 30, 2013. (3) FICO credit scores as reported by the seller of the mortgage loan at the time of delivery. (4) Unpaid principal balance of all loans with credit enhancement as a percentage of unpaid principal balance of single-family conventional guaranty book of business for which Fannie Mae has access to loan-level information. Includes primary mortgage insurance, pool insurance, lender recourse and other credit enhancement. (5) Expressed as a percentage of credit losses for the single-family guaranty book of business. Does not reflect the impact of recoveries that have not been allocated to specific loans. For information on total credit losses, refer to Fannie Mae’s 2013 Q3 Form 10-Q.

11 As of September 30, 2013 Alt-A (1) 2013(2) 2012(2) 2011 (2) 2010 (2) 2009 (2) 2008 2007 2006 2005 2004 and Earlier Unpaid principal balance (billions) (3) $136.0 $6.8 $7.9 $5.9 $2.8 $1.1 $2.8 $28.9 $31.0 $21.9 $27.0 Share of Alt-A 100.0% 5.0% 5.8% 4.3% 2.1% 0.8% 2.0% 21.2% 22.8% 16.1% 19.9% Weighted Average Origination Loan-to-Value Ratio 76.9% 99.1% 105.1% 75.2% 81.3% 76.6% 68.8% 75.1% 74.2% 73.1% 71.8% Origination Loan-to-Value Ratio > 90% (4) 12.7% 55.1% 58.7% 26.3% 31.7% 22.8% 2.4% 8.6% 4.8% 3.3% 5.3% Weighted Average Mark-to-Market Loan-to-Value Ratio 84.3% 92.2% 88.1% 63.4% 73.2% 72.0% 75.5% 97.6% 97.6% 85.3% 57.8% Mark-to-Market Loan-to-Value Ratio > 100% and <=125% 17.3% 20.6% 19.4% 2.5% 4.8% 6.1% 11.8% 25.1% 24.8% 17.6% 4.1% Mark-to-Market Loan-to-Value Ratio > 125% 11.0% 14.5% 13.2% 0.1% 0.2% 0.5% 3.2% 17.0% 17.9% 9.6% 1.2% Weighted Average FICO (5) 714 711 721 740 727 729 720 706 708 719 715 FICO < 620 (5) 1.8% 9.1% 7.4% 3.0% 3.9% 4.3% 0.3% 0.6% 0.6% 0.5% 1.7% Adjustable-rate 34.7% 0.3% 0.8% 2.5% 4.0% 3.8% 28.1% 40.7% 45.3% 49.8% 34.8% Interest Only 25.6%     0.1% 7.8% 38.4% 39.2% 32.3% 16.2% Negative Amortizing 2.6%        4.2% 6.6% 2.7% Investor 18.8% 35.3% 29.8% 24.9% 13.0% 5.7% 17.6% 17.4% 15.5% 19.1% 16.8% Condo/Co-op 10.1% 12.4% 11.1% 7.2% 8.9% 8.6% 6.3% 8.4% 10.6% 12.7% 9.7% California 21.0% 24.9% 25.3% 25.6% 14.7% 13.9% 19.2% 20.8% 18.6% 19.4% 23.3% Florida 11.5% 10.3% 11.5% 4.0% 3.3% 3.5% 9.9% 12.9% 13.7% 13.5% 9.4% Credit Enhanced (6) 13.4% 7.6% 7.8% 2.1% 2.2% 1.4% 14.1% 16.5% 13.7% 11.2% 18.4% Serious Delinquency Rate at December 31, 2012 11.36%  0.21% 1.05% 3.30% 4.89% 10.71% 17.41% 16.59% 11.76% 6.74% Serious Delinquency Rate at September 30, 2013 9.70% 0.13% 0.66% 1.39% 3.55% 4.65% 10.49% 16.01% 15.11% 10.51% 6.23% % of 2009 Credit Losses (7) 39.6%      0.4% 13.4% 15.8% 7.3% 2.6% % of 2010 Credit Losses (7) 33.2%    0.0% 0.0% 0.5% 11.8% 12.8% 5.7% 2.3% % of 2011 Credit Losses (7) 27.3%    0.1% 0.1% 0.3% 8.5% 10.1% 5.9% 2.5% % of 2012 Credit Losses (7) 23.7%  0.0% 0.0% 0.1% 0.1% 0.3% 7.9% 8.9% 4.3% 1.9% % of YTD 2013 Credit Losses (7) 27.0% 0.0% 0.1% 0.1% 0.2% 0.1% 0.2% 9.7% 9.9% 4.8% 1.9% Cumulative Default Rate (8)  0.0% 0.2% 0.6% 2.8% 4.0% 9.9% 22.3% 20.5% 13.2%  Origination Year Credit Characteristics of Alt-A Loans in the Single-Family Conventional Guaranty Book of Business (1) In reporting our Alt-A exposure, we have classified mortgage loans as Alt-A if and only if the lenders that deliver the mortgage loans to us have classified the loans as Alt-A based on documentation or other product features. We have loans with some features that are similar to Alt-A mortgage loans that we have not classified as Alt-A because they do not meet our classification criteria. (2) Newly originated Alt-A loans acquired after 2008 consist of the refinance of existing loans under our Refi Plus initiative. (3) Excludes non-Fannie Mae securities held in portfolio and those Alt-A and subprime wraps for which Fannie Mae does not have loan-level information. Fannie Mae had access to detailed loan-level information for approximately 99% of its single-family conventional guaranty book of business as of September 30, 2013. (4) The increase after 2008 is the result of our Refi Plus loans, which we began acquiring in April 2009 and which involve the refinance of existing Fannie Mae loans that can have loan-to-value ratios in excess of 100%. (5) FICO credit scores as reported by the seller of the mortgage loan at the time of delivery. (6) Defined as unpaid principal balance of Alt-A loans with credit enhancement as a percentage of unpaid principal balance of all Alt-A loans. At September 30, 2013, 9.1% of unpaid principal balance of Alt-A loans carried only primary mortgage insurance (no deductible), 3.2% had only pool insurance (which is generally subject to a deductible), 0.7% had primary mortgage insurance and pool insurance, and 0.4% carried other credit enhancement such as lender recourse. (7) Expressed as a percentage of credit losses for the single-family guaranty book of business. Does not reflect the impact of recoveries that have not been allocated to specific loans. For information on total credit losses, refer to Fannie Mae’s 2013 Q3 Form 10-Q. (8) Defaults include loan liquidations other than through voluntary pay-off or repurchase by lenders and includes loan foreclosures, short sales, sales to third parties and deeds in lieu of foreclosure. Cumulative Default Rate is the total number of single-family conventional loans in the guaranty book of business originated in the identified year that have defaulted, divided by the total number of single-family conventional loans in the guaranty book of business originated in the identified year.

12 2013 2012 2011 2010 2009 2013 2012 2011 2010 2009 Unpaid Principal Balance (billions) $73.4 $126.9 $45.9 $43.1 $20.2 $46.1 $66.9 $54.7 $44.7 $19.8 Share of Single-Family Conventional Guaranty Book 2.6% 4.5% 1.6% 1.5% 0.7% 1.6% 2.4% 1.9% 1.6% 0.7% Average Unpaid Principal Balance $178,844 $194,753 $203,154 $215,652 $222,653 $136,521 $143,546 $147,047 $157,714 $161,843 Share of Total Refinances 3.6% 6.2% 2.2% 2.1% 1.0% 2.3% 3.3% 2.7% 2.2% 1.0% Weighted Average Origination Loan-to-Value Ratio 110.1% 112.6% 95.0% 93.1% 91.5% 60.2% 61.2% 60.6% 63.0% 65.0% Origination Loan-to-Value Ratio > 90% 75.7% 77.9% 58.7% 53.6% 48.8%      Weighted Average Mark-to-Market Loan-to-Value Ratio 102.5% 94.8% 80.4% 82.2% 85.0% 56.6% 52.9% 50.7% 54.0% 58.5% Weighted Average FICO (2) 723 736 744 743 744 738 750 754 755 753 FICO < 620 (2) 6.5% 4.0% 2.3% 2.3% 1.7% 5.1% 3.3% 2.1% 1.8% 1.7% Fixed-rate 99.6% 99.4% 97.2% 97.4% 97.8% 99.4% 99.0% 97.7% 97.6% 98.0% Primary Residence 78.4% 85.0% 85.8% 90.2% 94.5% 81.6% 86.7% 88.1% 90.5% 92.0% Second/Vacation Home 3.1% 2.8% 3.4% 3.5% 3.3% 3.6% 3.1% 3.6% 3.6% 4.6% Investor 18.5% 12.2% 10.7% 6.3% 2.2% 14.8% 10.2% 8.3% 5.9% 3.4% Condo/Co-op 13.3% 11.1% 10.4% 9.9% 8.3% 9.6% 7.7% 5.9% 6.2% 7.3% Serious Delinquency Rate Overall Serious Delinquency Rate 0.08% 0.51% 1.18% 1.99% 2.91% 0.02% 0.12% 0.32% 0.60% 1.03% Serious Delinquency Rate by MTMLTV Ratio: <=80% 0.04% 0.20% 0.62% 0.86% 1.16% 0.02% 0.12% 0.32% 0.56% 0.87% 80% and <=105% 0.06% 0.46% 1.66% 2.69% 3.44%  0.22% 3.35% 3.69% 3.85% 105% and <=125% 0.10% 0.79% 3.57% 5.74% 8.29%   8.33%  2.33% >125% 0.19% 1.18% 4.84% 7.82% 8.30%    5.56% 2.22% Mark-to-Market Loan-to-Value Ratio <=80% 10.9% 27.4% 52.1% 45.5% 35.1% 99.8% 99.9% 99.8% 98.4% 93.5% 80% and <=105% 56.0% 48.0% 44.7% 50.4% 59.2% 0.2% 0.1% 0.2% 1.6% 6.4% 105% and <=125% 18.8% 15.2% 3.0% 3.7% 5.1%   0.0% 0.0% 0.1% >125% 14.3% 9.5% 0.2% 0.4% 0.6%   0.0% 0.0% 0.0% As of September 30, 2013 Origination Year HARP (1) Other Refi Plus (1) Credit Characteristics of Refi Plus Loans in the Single-Family Conventional Guaranty Book of Business (1) Our Refi Plus initiative, under which we acquire HARP loans, started in April 2009. HARP loans have LTV ratios at origination in excess of 80%, while Other Refi Plus loans have LTV ratios at origination of up to 80%. (2) FICO credit scores as reported by the seller of the mortgage loan at the time of delivery.

13 0% 1% 2% 3% 4% 5% 6% 7% Q3 2013Q2 2013Q1 20132012 Q42012 Q32012 Q22012 Q12011 Q42011 Q32011 Q22011 Q12010 Q42010 Q3 Serious Delinquency Rate by Region (3) Midwest Northeast Southeast Southwest West 0% 2% 4% 6% 8% 10% 12% 14% Q3 2013Q2 2013Q1 20132012 Q42012 Q32012 Q22012 Q12011 Q42011 Q32011 Q22011 Q12010 Q42010 Q3 Serious Delinquency Rate by Select States AZ CA FL NV Select Midwest States All Serious Delinquency Rates by Select States and Region of Single-Family Conventional Guaranty Book of Business(1) (1) Calculated based on the number of loans in Fannie Mae’s single-family conventional guaranty book of business within each specified category. (2) Select Midwest states are Illinois, Indiana, Michigan, and Ohio. (3) For information on which states are included in each region, refer to footnote 9 to Table 30 in Fannie Mae’s 2013 Q3 Form 10-Q. (2)

14 69,258 63,228 63,761 61,492 54,651 0 25,000 50,000 75,000 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 Nu mb er o f Lo an s Modifications Repayment Plans and Forbearances Completed Short Sales and Deeds-in-Lieu Single-Family Completed Workouts by Type  Modifications involve changes to the original mortgage loan terms, which may include a change to the product type, interest rate, amortization term, maturity date and/or unpaid principal balance. Modifications include both completed modifications under the Administration’s Home Affordable Modification Program (HAMP) and completed non-HAMP modifications, and do not reflect loans currently in trial modifications.  Repayment plans involve plans to repay past due principal and interest over a reasonable period of time through temporarily higher monthly payments. Loans with completed repayment plans are included for loans that were at least 60 days delinquent at initiation.  Forbearances involve an agreement to suspend or reduce borrower payments for a period of time. Loans with forbearance plans are included for loans that were at least 90 days delinquent at initiation.  Deeds-in-lieu of foreclosure involve the borrower’s voluntarily signing over title to the property.  In a short sale, the borrower, working with the servicer and Fannie Mae, sells the home prior to foreclosure for less than the amount owed to pay off the loan, accrued interest and other expenses from the sale proceeds.

15 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 3 months post modification 78% 81% 84% 84% 83% 84% 85% 84% 84% 85% 86% 83% 6 months post modification 75% 77% 78% 79% 79% 79% 78% 77% 80% 82% 79% n/a 9 months post modification 73% 72% 75% 77% 76% 74% 73% 76% 78% 78% n/a n/a 12 months post modification 70% 69% 74% 75% 72% 71% 73% 75% 76% n/a n/a n/a 15 months post modification 67% 68% 73% 72% 70% 71% 73% 74% n/a n/a n/a n/a 18 months post modification 67% 68% 71% 71% 70% 71% 72% n/a n/a n/a n/a n/a 21 months post modification 67% 66% 70% 72% 71% 71% n/a n/a n/a n/a n/a n/a 24 months post modification 65% 65% 71% 73% 71% n/a n/a n/a n/a n/a n/a n/a % Current or Paid Off Re-performance Rates of Modified Single-Family Loans(1) (1) Excludes loans that were classified as subprime adjustable rate mortgages that were modified into fixed rate mortgages. Modifications include permanent modifications, but do not reflect loans currently in trial modifications.

16 2003 2004 2005 20062007 2008 20092010 2013 20112012 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% Yr1-Q1 Yr2-Q1 Yr3-Q1 Yr4-Q1 Yr5-Q1 Yr6-Q1 Yr7-Q1 Yr8-Q1 Yr9-Q1 Yr10-Q1 Yr11-Q1 Cu mu lat ive D efa ult R ate Time Since Beginning of Origination Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Note: Defaults consist of loan liquidations other than through voluntary pay-off or repurchase by lenders and include loan foreclosures, short sales, sales to third parties and deeds-in-lieu of foreclosure. Cumulative Default Rate is the total number of single-family conventional loans in the guaranty book of business originated in the identified year that have defaulted, divided by the total number of single-family conventional loans in the guaranty book of business originated in the identified year. Data as of September 30, 2013 is not necessarily indicative of the ultimate performance of the loans and performance is likely to change, perhaps materially, in future periods. Cumulative Default Rates of Single-Family Conventional Guaranty Book of Business by Origination Year

17 YTD 2013 2012 2011 2010 2009 2008 Beginning Balance N/A 105,666 118,528 162,489 86,155 63,538 33,729 N/A N/A Arizona 425 3,442 8,133 16,172 20,691 12,854 5,532 2,168 3,865 California 550 4,948 14,980 27,589 34,051 19,565 10,624 5,100 9,448 Florida 1,214 23,467 23,586 13,748 29,628 13,282 6,159 18,808 12,633 Nevada 626 1,737 3,014 8,406 9,418 6,075 2,906 1,201 1,335 Select Midwest States (1) 725 25,088 40,070 33,777 45,411 28,464 23,668 26,676 29,668 All other States 669 53,494 84,696 100,004 122,879 65,377 45,763 46,988 50,276 Total Acquisitions N/A 112,176 174,479 199,696 262,078 145,617 94,652 N/A N/A Total Dispositions N/A (116,901) (187,341) (243,657) (185,744) (123,000) (64,843) N/A N/A Ending Inventory N/A 100,941 105,666 118,528 162,489 86,155 63,538 N/A N/A State REO Inventory as of September 30, 2013 REO Inventory as of September 30, 2012 Average Days From Last Paid Installment to Foreclosure For YTD 2013 (2) (3) (4) REO Acquisitions and Dispositions (Number of Properties) Single-Family Real Estate Owned (REO) in Select States (1) Select Midwest States are Illinois, Indiana, Michigan, and Ohio. (2) Measured from the borrowers’ last paid installment on their mortgages to when the related properties were added to our REO inventory for foreclosures completed during the first nine months of 2013. (3) Fannie Mae incurs additional costs associated with property taxes, hazard insurance, and legal fees while a delinquent loan remains in the foreclosure process. Additionally, the longer a loan remains in the foreclosure process, the longer it remains in our guaranty book of business as a seriously delinquent loan. The average number of days from last paid installment to foreclosure for all states combined were 325, 407, 479, 529, and 655 in each of the years 2008 through 2012, respectively, and 785 in 2013 YTD. (4) Home Equity Conversion Mortgages (HECMs) excluded from calculation.

18 Q3 Q4 Q1 Q2 Q3 CA 68.4% 71.1% 72.2% 75.5% 78.7% AZ 66.0% 69.9% 73.1% 76.5% 78.2% FL 61.6% 63.7% 65.8% 68.8% 71.3% IL 64.4% 67.3% 66.7% 68.6% 70.5% NV 55.4% 59.1% 63.0% 67.1% 70.1% Top 5 64.2% 67.0% 68.8% 71.7% 73.9% All Others 74.8% 76.2% 76.7% 78.6% 79.8% Total 68.1% 70.4% 71.7% 74.3% 76.2% Short Sales Gross Sales Price/UPB 2012 2013 Q3 Q4 Q1 Q2 Q3 CA 68.5% 73.2% 78.0% 85.3% 86.7% FL 59.6% 62.2% 64.5% 67.8% 70.7% MI 57.2% 56.9% 59.9% 65.1% 67.8% OH 60.1% 59.2% 61.7% 62.4% 64.6% IL 53.1% 55.0% 57.2% 61.9% 63.2% Top 5 61.8% 63.9% 66.9% 71.1% 71.7% All Others 71.1% 72.2% 73.5% 77.6% 77.8% Total 67.2% 68.5% 70.6% 74.6% 74.8% 2012REO Gross Sales Price/UPB 2013 68% 70% 72% 74% 76% 61% 63% 64% 67% 68% 67% 68% 71% 75% 75% 61% 62% 65% 68% 68% 58% 62% 66% 70% 74% 78% Q3 Q4 Q1 Q2 Q3 2012 2013 Short Sales Gross Sales/ UPB Short Sales Net Sales/ UPB REO Gross Sales/ UPB REO Net Sales/ UPB Single-Family Short Sales and REO Sales Price / UPB of Mortgage Loans(1) (2) Gross Sales Price/UPB Trends on Direct Sale Dispositions(1) and Short Sales(2) Top 5 States(3) (1) Calculated as the sum of sale proceeds received on REO properties that have been sold to a third party (excluding properties that have been repurchased by the seller/servicer, acquired by a mortgage insurance company, redeemed by a borrower, or sold through the FHFA Rental Pilot) divided by the aggregate unpaid principal balance (UPB) of the related loans. Gross sales price represents the contract sale price. Net sales price represents the contract sale price less selling costs for the property and adjusted for other charges/credits paid by or due to the seller at closing. Properties disposed of in the third and fourth quarters of 2012 through structured rental transactions have been excluded from the Net/Gross Proceeds to UPB calculations. (2) Calculated as the sum of sales proceeds received on short sales divided by the aggregate unpaid principal balance (UPB) of the related loans. Gross sales price represents the contract sale price. Net sales price represents the contract sale price less charges/credits paid by or due to other parties at closing. (3) The states shown have the greatest volume of properties sold YTD 2013 in each respective category.

19 Total Multifamily Guaranty Book of Business (1) 36,734 $202.3 100% 0.18% 100% 100% 100% 100% Credit Enhanced Loans: Credit Enhanced 33,125 $183.9 91% 0.16% 35% 73% 83% 68% Non-Credit Enhanced 3,609 $18.4 9% 0.40% 65% 27% 17% 32% Origination loan-to-value ratio: (4) Less than or equal to 70% 23,612 $113.7 56% 0.09% 13% 14% 18% 8% Greater than 70% and less than or equal to 80% 10,647 $81.5 40% 0.28% 81% 71% 70% 89% Greater than 80% 2,475 $7.1 4% 0.52% 6% 15% 12% 3% Delegated Underwriting and Servicing (DUS ®) Loans: (5) DUS ® - Small Balance Loans(6) 8,762 $16.6 8% 0.29% 3% 7% 9% 7% DUS ® - Non Small Balance Loans 12,465 $159.5 79% 0.15% 44% 71% 72% 61% DUS ® - Total 21,227 $176.1 87% 0.16% 47% 78% 81% 68% Non-DUS - Small Balance Loans(6) 14,638 $11.4 6% 0.63% 15% 16% 12% 10% Non-DUS - Non Small Balance Loans 869 $14.8 7% 0.13% 38% 6% 7% 22% Non-DUS - Total 15,507 $26.2 13% 0.35% 53% 22% 19% 32% Maturity Dates: Loans maturing in 2013 299 $1.2 1% 9.10% 1% 2% 7% 10% Loans maturing in 2014 1,973 $11.4 6% 0.21% 9% 12% 5% 11% Loans maturing in 2015 2,687 $13.6 7% 0.16% 7% 8% 6% 4% Loans maturing in 2016 2,749 $14.4 7% 0.28% 14% 12% 8% 14% Loans maturing in 2017 3,882 $19.8 10% 0.33% 47% 33% 21% 12% Other maturities 25,144 $142.0 70% 0.08% 22% 34% 53% 49% Loan Size Distribution: Less than or equal to $750K 9,360 $2.8 1% 0.62% 4% 5% 5% 2% Greater than $750K and less than or equal to $3M 12,855 $19.2 10% 0.46% 26% 17% 16% 16% Greater than $3M and less than or equal to $5M 4,623 $16.9 8% 0.36% -1% 12% 11% 17% Greater than $5M and less than or equal to $25M 8,567 $87.6 43% 0.17% 26% 55% 50% 48% Greater than $25M 1,329 $75.8 37% 0.07% 45% 11% 18% 17% % of 2010 Multifamily Credit Losses % of 2011 Multifamily Credit Losses % of 2012 Multifamily Credit Losses As of September 30, 2013 Unpaid Principal Balance (Billions) % of Multifamily Guaranty Book of Business (UPB) % Seriously Delinquent (2) Loan Counts % of YTD 2013 Multifamily Credit Losses (3) (1) Excludes loans that have been defeased. Defeasance is prepayment of a loan through substitution of collateral. (2) We classify multifamily loans as seriously delinquent when payment is 60 days or more past due. (3) Negative values are the result of recoveries on previously charged-off amounts. (4) Weighted Average Origination loan-to-value ratio is 66% as of September 30, 2013. (5) Under the Delegated Underwriting and Servicing, or DUS ®, product line, Fannie Mae acquires individual, newly originated mortgages from specially approved DUS lenders using DUS underwriting standards and/or DUS loan documents. Because DUS lenders generally share the risk of loss with Fannie Mae, they are able to originate, underwrite, close and service most loans without our pre-review. (6) Multifamily loans under $3 million and up to $5 million in high cost-of-living areas. Multifamily Credit Profile by Loan Attributes

20 As of September 30, 2013 Unpaid Principal Balance (Billions) % of Multifamily Guaranty Book of Business (UPB) % Seriously Delinquent (2) # of Seriously Delinquent loans (2) % of YTD 2013 Multifamily Credit Losses (3) % of 2012 Multifamily Credit Losses (3) % of 2011 Multifamily Credit Losses % of 2010 Multifamily Credit Losses Total Multifamily Guaranty Book of Business (1) $202.3 100% 0.18% 148 100% 100% 100% 100% By Acquisition Year: 2013 $21.7 11%       2012 $33.3 17%   0%    2011 $22.8 11% 0.01% 1 0% 0%   2010 $16.2 8% 0.08% 4 37% 0%   2009 $16.4 8% 0.04% 2 -12% 7% 6% 2% 2008 $21.1 10% 0.55% 35 13% 23% 31% 17% 2007 $28.7 14% 0.32% 55 21% 48% 33% 38% 2006 $14.1 7% 0.33% 17 19% 10% 7% 17% 2005 $11.0 6% 0.08% 6 8% 17% 3% 2% Prior to 2005 $16.8 8% 0.52% 28 13% -4% 20% 25% 2005 2006 2007 2008 2009 2011 2010 2012 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 SD Q (% ) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2013 (1) Excludes loans that have been defeased. Defeasance is prepayment of a loan through substitution of collateral. (2) We classify multifamily loans as seriously delinquent when payment is 60 days or more past due. (3) Negative values are the result of recoveries on previously charged-off amounts. Multifamily Credit Profile by Acquisition Year Multifamily SDQ Rate by Acquisition Year Cumulative Defaults by Acquisition Year 2010 2009 2009 0. 0% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Cum ulat ive Def ault Rat e 2005 2006 20 7 2008 2009 2010 2011 2012 2013 2005 2007 2008 2006 2012 2011 2013

21 Total Multifamily Guaranty Book of Business (1) $202.3 100% 0.18% 100% 100% 100% 100% Region: (4) Midwest $17.7 9% 0.42% -6% 15% 23% 10% Northeast $40.1 20% 0.12% -3% 10% 3% 5% Southeast $43.1 21% 0.18% 22% 53% 42% 40% Southwest $37.4 18% 0.12% 3% 8% 26% 40% Western $63.9 32% 0.20% 84% 14% 6% 6% Top Five States by UPB: California $49.6 25% 0.04% 3% 1% 1% 2% New York $23.9 12% 0.09% 1% 3% 0% 1% Texas $19.1 9% 0.10% 4% 2% 19% 12% Florida $10.6 5% 0.23% 15% 36% 10% 13% Washington $7.3 4% 0.04% 0% 0% 0% 0% Asset Class: (5) Conventional/Co-op $179.5 89% 0.21% 100% 94% 96% 99% Seniors Housing $14.3 7%      Manufactured Housing $5.4 3%  0% 3% 0% 0% Student Housing $3.1 2%  0% 3% 4% 1% Targeted Affordable Segment: Privately Owned with Subsidy (6) $29.5 15% 0.14% 2% 3% 14% 6% DUS & Non-DUS Lenders/Servicers: DUS: Bank (Direct, Owned Entity, or Subsidiary) $72.7 36% 0.19% 37% 21% 29% 45% DUS: Non-Bank Financial Institution $118.3 58% 0.16% 55% 70% 68% 50% Non-DUS: Bank (Direct, Owned Entity, or Subsidiary) $10.0 5% 0.37% 4% 6% 1% 4% Non-DUS: Non-Bank Financial Institution $1.1 1% 0.24% 4% 2% 1% 1% Non-DUS: Public Agency/Non Profit $0.2 0%  0% 0% 0% 0% % of 2010 Multifamily Credit Losses As of September 30, 2013 % of Multifamily Guaranty Book of Business (UPB) % Seriously Delinquent (2) % of 2011 Multifamily Credit Losses Unpaid Principal Balance (Billions) % of 2012 Multifamily Credit Losses % of YTD 2013 Multifamily Credit Losses (3) (1) Excludes loans that have been defeased. Defeasance is prepayment of a loan through substitution of collateral. (2) We classify multifamily loans as seriously delinquent when payment is 60 days or more past due. (3) Negative values are the result of recoveries on previously charged-off amounts. (4) For information on which states are included in each region, refer to footnote 9 to Table 30 in Fannie Mae’s 2013 Q3 Form 10-Q. (5) Conventional Multifamily/Cooperative Housing/Affordable Housing: Conventional Multifamily is a loan secured by a residential property comprised of five or more dwellings which offers market rental rates (i.e., not subsidized or subject to rent restrictions). Cooperative Housing is a multifamily loan made to a cooperative housing corporation and secured by a first or subordinated lien on a cooperative multifamily housing project that contains five or more units. Affordable Housing is a multifamily loan on a mortgaged property encumbered by a regulatory agreement or recorded restriction that limits rents, imposes income restrictions on tenants or places other restrictions on the use of the property. Manufactured Housing Communities: A multifamily loan secured by a residential development that consists of sites for manufactured homes and includes utilities, roads and other infrastructure. In some cases, landscaping and various other amenities such as a clubhouse, swimming pool, and tennis and/or sports courts are also included. Seniors Housing: A multifamily loan secured by a mortgaged property that is intended to be used for residents for whom the owner or operator provides special services that are typically associated with either “independent living” or “assisted living.” Some Alzheimer’s and skilled nursing capabilities are permitted. Dedicated Student Housing: Multifamily loans secured by residential properties in which college or graduate students make up at least 80% of the tenants. Dormitories are not included. (6) The Multifamily Affordable Business Channel focuses on financing properties that are under a regulatory agreement that provides long-term affordability, such as properties with rent subsidies or income restrictions. Multifamily Credit Profile

22 Example: UPB in NY is $24.9B and 2013 Credit Losses are $1M Numbers: Represents YTD 2013 credit losses/(gains) for each state, which total $117M as of September 30, 2013. States with no numbers had less than $500K in credit losses or less than $500K in credit-related income in 2013. Shading: Represent unpaid principal balance (UPB) for each state, which totals $202.3B as of September 30, 2013. (1) Excludes loans that have been defeased. Defeasance is prepayment of a loan through substitution of collateral. Multifamily YTD 2013 Credit Losses by State ($ Millions) Portfolio UPB(1) Concentration by State as of 09/30/2013 Note: Negative values are the result of recoveries on previously charged-off amounts.