CERTIFICATE OF DESIGNATION OF TERMS OF 

VARIABLE RATE NON-CUMULATIVE PREFERRED STOCK, SERIES P 

1. Designation, Par Value and Number of Shares. 

The designation of the series of preferred stock of the Federal National Mortgage 

Association (“Fannie Mae”) created by this resolution shall be “Variable Rate Non-Cumulative 

Preferred Stock, Series P” (the “Series P Preferred Stock”), and the number of shares initially 

constituting the Series P Preferred Stock is 40,000,000. Shares of Series P Preferred Stock will 

have no par value and a stated value of $25 per share. Shares of Series P Preferred Stock will 

have no stated maturity date, and, subject to Section 3 below, will be perpetual. The Board of 

Directors of Fannie Mae, or a duly authorized committee thereof, in its sole discretion, may 

reduce the number of shares of Series P Preferred Stock, provided such reduction is not below 

the number of shares of Series P Preferred Stock then outstanding. 

2. Dividends. 

(a) Holders of record of Series P Preferred Stock (each individually a “Holder”, or 

collectively the “Holders”) will be entitled to receive, when, as and if declared by the Board of 

Directors of Fannie Mae, or a duly authorized committee thereof, in its sole discretion out of 

funds legally available therefor, non-cumulative quarterly dividends which will accrue from and 

including the date of issuance and will be payable on March 31, June 30, September 30 and 

December 31 of each year (each, a “Dividend Payment Date”), commencing December 31, 2007. 

If a Dividend Payment Date is not a Business Day, the related dividend (if declared) will be paid 

on the next succeeding Business Day with the same force and effect as though paid on the 

Dividend Payment Date, without any increase to account for the period from such Dividend 

Payment Date through the date of actual payment. A “Business Day” shall mean any day other 

than a Saturday, Sunday, or a day on which banking institutions in New York, New York are 

authorized or required by law to close. Dividends will be paid to Holders on the record date 

fixed by the Board of Directors or a duly authorized committee thereof, which will be no earlier 

than 45 days or later than 10 days prior to the applicable Dividend Payment Date. 

If declared, the initial dividend will be for the period from and including the date of 

issuance to but excluding December 31, 2007. Thereafter, if declared, quarterly dividends will 

accrue at a per annum rate equal to the greater of (i) 4.50% and (ii) the sum of the 3-Month 

LIBOR (as defined below) applicable to such quarterly period and 0.75%; the dividend rate will 

be rounded to the fourth digit after the decimal point (if the fifth digit to the right of the decimal 

point is five or greater, the fourth digit will be rounded up by one). On December 31, 2007 and 

each March 31, June 30, September 30 and December 31 thereafter, the previous dividend rate 

will be replaced with the dividend rate determined in accordance with the immediately preceding 

sentence. In determining the dividend rate for any Dividend Period (as defined below), 3-Month 

LIBOR for such Dividend Period will be calculated by Fannie Mae on the second London 

Business Day (defined as any day on which commercial banks are open for business (including 

dealings in foreign exchange and deposits in U.S. dollars) in London, England) immediately 

preceding the first day of such Dividend Period (each a “LIBOR Determination Date”). The 

“Dividend Period” relating to a Dividend Payment Date will be the period from and including 

the preceding Dividend Payment Date (or, in the case of the initial dividend, September 28, 

1
2007) to but excluding such Dividend Payment Date. If Fannie Mae redeems the Series P 

Preferred Stock, the dividend that would otherwise be payable for the then-current quarterly 

Dividend Period will be included in the redemption price of the shares redeemed and will not be 

separately payable. Dividends payable on the Series P Preferred Stock for any period will be 

computed on the basis of the actual number of days elapsed during such period and a 360-day 

year. 

“3-Month LIBOR” for any LIBOR Determination Date with respect to any Dividend 

Period will be the rate equal to (in the following order of priority): 

(1) the rate (expressed as a percentage per annum) for U.S. dollar deposits having 

a three-month maturity that appears on Reuters Screen LIBOR01 as of 11:00 a.m. 

(London time) on the related LIBOR Determination Date. “Reuters Screen LIBOR01” 

means the display designated as “Reuters Screen LIBOR01 Page” or such other page as 

may replace Reuters Screen LIBOR01 Page on that service or such other service or 

services as may be nominated by the British Bankers’ Association as the information 

vendor for the purpose of displaying London interbank offered rates for U.S. dollar 

deposits. If at least two rates appear on the Reuters Screen LIBOR01, the rate on the 

LIBOR Determination Date will be the arithmetic mean of such rates; 

(2) if the rate specified in (1) cannot be identified on the related LIBOR 

Determination Date, then the Calculation Agent will request the principal London offices 

of five leading banks (which may include affiliates of the Placement Agents) in the 

London interbank market selected by the Calculation Agent (after consultation with 

Fannie Mae, if Fannie Mae is not then acting as Calculation Agent) to provide those 

banks’ offered quotations (expressed as percentages per annum) to prime banks in the 

London interbank market for deposits in U.S. dollars having a three-month maturity as of 

11:00 a.m. (London time) on such LIBOR Determination Date. If at least two quotations 

are provided, then 3-Month LIBOR will be the arithmetic mean determined by the 

Calculation Agent of the quotations obtained (and, if five quotations are provided, 

eliminating the highest quotation (or in the event of equality, one of the highest) and the 

lowest quotation (or in the event of equality, one of the lowest)); 

(3) if fewer than two quotations are provided as requested in clause (2) above, 

then the Calculation Agent will request five major banks (which may include affiliates of 

the Placement Agents) in New York, New York selected by the Calculation Agent (after 

consultation with Fannie Mae, if Fannie Mae is not then acting as Calculation Agent) to 

provide those banks’ offered quotations (expressed as percentages per annum) to leading 

European banks for loans having a three-month maturity in U.S. dollars as of 11:00 a.m. 

(New York City time) on such LIBOR Determination Date. If at least two quotations are 

provided, then 3-Month LIBOR will be the arithmetic mean determined by the 

Calculation Agent of the quotations obtained (and, if five quotations are provided, 

eliminating the highest quotation (or in the event of equality, one of the highest) and the 

lowest quotation (or in the event of equality, one of the lowest)); and 

(4) if fewer than two quotations are so provided as requested in clause (3) above, 

then 3-Month LIBOR as of such LIBOR Determination Date will be 3-Month LIBOR 

2
determined for the immediately preceding Dividend Period. If the applicable Dividend 

Period is the first Dividend Period, then 3-Month LIBOR will be the rate for deposits in 

U.S. dollars having a three-month maturity that appeared, as of 11:00 a.m. (London time) 

on the most recent London Business Day preceding the LIBOR Determination Date for 

which the rate was displayed on Reuters Screen LIBOR01 with respect to deposits 

commencing on the second London Business Day following that date. 

The Calculation Agent’s determination of the 3-Month LIBOR and the dividend rate will 

be final and binding absent manifest error. 

(b) No dividend (other than dividends or distributions paid in shares of, or options, 

warrants or rights to subscribe for or purchase shares of, the common stock of Fannie Mae or any 

other stock of Fannie Mae ranking, as to the payment of dividends and the distribution of assets 

upon dissolution, liquidation or winding up of Fannie Mae, junior to the Series P Preferred 

Stock) may be declared or paid or set apart for payment on Fannie Mae’s common stock (or on 

any other stock of Fannie Mae ranking, as to the payment of dividends, junior to the Series P 

Preferred Stock) unless dividends have been declared and paid or set apart (or ordered to be set 

apart) on the Series P Preferred Stock for the then-current quarterly Dividend Period; provided, 

however, that the foregoing dividend preference shall not be cumulative and shall not in any way 

create any claim or right in favor of the Holders of Series P Preferred Stock in the event that 

dividends have not been declared or paid or set apart (or ordered to be set apart) on the Series P 

Preferred Stock in respect of any prior Dividend Period. If the full dividend on the Series P 

Preferred Stock is not paid for any quarterly Dividend Period (including a dividend that is not 

paid because regulatory approval is not granted), the Holders of Series P Preferred Stock will 

have no claim in respect of the unpaid amount so long as no dividend (other than those referred 

to above) is paid on Fannie Mae’s common stock (or any other stock of Fannie Mae ranking, as 

to the payment of dividends, junior to the Series P Preferred Stock) for such Dividend Period. 

(c) The Board of Directors of Fannie Mae, or a duly authorized committee thereof, may, 

in its discretion, choose to pay dividends on the Series P Preferred Stock without the payment of 

any dividends on Fannie Mae’s common stock (or any other stock of Fannie Mae ranking, as to 

the payment of dividends, junior to the Series P Preferred Stock). 

(d) No full dividends shall be declared or paid or set apart for payment on any stock of 

Fannie Mae ranking, as to the payment of dividends, on a parity with the Series P Preferred 

Stock for any period unless full dividends have been declared and paid or set apart for payment 

on the Series P Preferred Stock for the then-current quarterly Dividend Period. When dividends 

are not paid in full upon the Series P Preferred Stock and all other classes or series of stock of 

Fannie Mae, if any, ranking, as to the payment of dividends, on a parity with the Series P 

Preferred Stock, all dividends declared upon shares of Series P Preferred Stock and all such other 

stock of Fannie Mae will be declared pro rata so that the amount of dividends declared per share 

of Series P Preferred Stock and all such other stock will in all cases bear to each other the same 

ratio that accrued dividends per share of Series P Preferred Stock (but without, in the case of any 

noncumulative preferred stock, accumulation of unpaid dividends for prior Dividend Periods) 

and such other stock bear to each other. 

3
(e) No dividends may be declared or paid or set apart for payment on any shares of 

Series P Preferred Stock if at the same time any arrears exist or default exists in the payment of 

dividends on any outstanding class or series of stock of Fannie Mae ranking, as to the payment 

of dividends, prior to the Series P Preferred Stock. 

(f) Holders of Series P Preferred Stock will not be entitled to any dividends, whether 

payable in cash or property, other than as herein provided and will not be entitled to interest, or 

any sum in lieu of interest, in respect of any dividend payment. 

3. Optional Redemption. 

(a) The Series P Preferred Stock shall not be redeemable prior to September 30, 2012. 

On and after that date, subject to (x) the notice provisions set forth in Section 3(b) below, (y) the 

receipt of any required regulatory approvals and (z) any further limitations which may be 

imposed by law, Fannie Mae may redeem the Series P Preferred Stock, in whole or in part, at 

any time or from time to time, out of funds legally available therefor, at the redemption price of 

$25 per share plus an amount equal to the amount of the dividend (whether or not declared) for 

the then-current quarterly Dividend Period accrued to but excluding the date of such redemption, 

but without accumulation of unpaid dividends on the Series P Preferred Stock for prior Dividend 

Periods. The amount of dividends per share payable at redemption will be rounded to the fourth 

digit after the decimal point (if the fifth digit to the right of the decimal point is five or greater, 

the fourth digit will be rounded up by one). If less than all of the outstanding shares of Series P 

Preferred Stock are to be redeemed, Fannie Mae will select the shares to be redeemed from the 

outstanding shares not previously called for redemption by lot or pro rata (as nearly as possible) 

or by any other method that the Board of Directors of Fannie Mae, or a duly authorized 

committee thereof, in its sole discretion deems equitable. 

(b) In the event Fannie Mae shall redeem any or all of the Series P Preferred Stock as 

aforesaid, Fannie Mae will give written or electronic notice of any such redemption to Holders of 

Series P Preferred Stock not less than 30 days prior to the date fixed by the Board of Directors of 

Fannie Mae, or duly authorized committee thereof, for such redemption. Each such notice will 

state: (1) the number of shares of Series P Preferred Stock to be redeemed and, if fewer than all 

of the shares of Series P Preferred Stock held by a Holder are to be redeemed, the number of 

shares to be redeemed from such Holder; (2) the redemption price; (3) the redemption date; and 

(4) the place at which a Holder’s certificate(s) representing shares of Series P Preferred Stock 

must be presented upon such redemption. Failure to give notice, or any defect in the notice, to 

any Holder of Series P Preferred Stock shall not affect the validity of the proceedings for the 

redemption of shares of any other Holder of Series P Preferred Stock being redeemed. 

(c) Notice having been given as herein provided, from and after the redemption date, 

dividends on the Series P Preferred Stock called for redemption shall cease to accrue and such 

Series P Preferred Stock called for redemption will no longer be deemed outstanding, and all 

rights of the Holders thereof as registered holders of such shares of Series P Preferred Stock will 

cease. Upon surrender in accordance with said notice of the certificate(s) representing shares of 

Series P Preferred Stock so redeemed (properly endorsed or assigned for transfer, if the Board of 

Directors of Fannie Mae, or a duly authorized committee thereof, shall so require and the notice 

shall so state), such shares shall be redeemed by Fannie Mae at the redemption price aforesaid. 

4
Any shares of Series P Preferred Stock that shall at any time have been redeemed shall, after 

such redemption, be cancelled and not reissued. In case fewer than all the shares represented by 

any such certificate are redeemed, a new certificate shall be issued representing the unredeemed 

shares without cost to the Holder thereof. 

(d) The Series P Preferred Stock will not be subject to any mandatory redemption, 

sinking fund or other similar provisions. In addition, Holders of Series P Preferred Stock will 

have no right to require redemption of any shares of Series P Preferred Stock. 

4. Liquidation Rights. 

(a) Upon any voluntary or involuntary dissolution, liquidation or winding up of Fannie 

Mae, after payment or provision for the liabilities of Fannie Mae and the expenses of such 

dissolution, liquidation or winding up, the Holders of outstanding shares of the Series P 

Preferred Stock will be entitled to receive out of the assets of Fannie Mae or proceeds thereof 

available for distribution to stockholders, before any payment or distribution of assets is made to 

holders of Fannie Mae’s common stock (or any other stock of Fannie Mae ranking, as to the 

distribution of assets upon dissolution, liquidation or winding up of Fannie Mae, junior to the 

Series P Preferred Stock), the amount of $25 per share plus an amount, determined in accordance 

with Section 2 above, equal to the dividend (whether or not declared) for the then-current 

quarterly Dividend Period accrued to but excluding the date of such liquidation payment, but 

without accumulation of unpaid dividends on the Series P Preferred Stock for prior Dividend 

Periods. 

(b) If the assets of Fannie Mae available for distribution in such event are insufficient to 

pay in full the aggregate amount payable to Holders of Series P Preferred Stock and holders of 

all other classes or series of stock of Fannie Mae, if any, ranking, as to the distribution of assets 

upon dissolution, liquidation or winding up of Fannie Mae, on a parity with the Series P 

Preferred Stock, the assets will be distributed to the Holders of Series P Preferred Stock and 

holders of all such other stock pro rata, based on the full respective preferential amounts to 

which they are entitled (but without, in the case of any noncumulative preferred stock, 

accumulation of unpaid dividends for prior Dividend Periods). 

(c) Notwithstanding the foregoing, Holders of Series P Preferred Stock will not be 

entitled to be paid any amount in respect of a dissolution, liquidation or winding up of Fannie 

Mae until holders of any classes or series of stock of Fannie Mae ranking, as to the distribution 

of assets upon dissolution, liquidation or winding up of Fannie Mae, prior to the Series P 

Preferred Stock have been paid all amounts to which such classes or series are entitled. 

(d) Neither the sale, lease or exchange (for cash, shares of stock, securities or other 

consideration) of all or substantially all of the property and assets of Fannie Mae, nor the merger, 

consolidation or combination of Fannie Mae into or with any other entity or the merger, 

consolidation or combination of any other entity into or with Fannie Mae, shall be deemed to be 

a dissolution, liquidation or winding up, voluntary or involuntary, for the purposes of this 

Section 4. 

5
(e) After payment of the full amount of the distribution of assets upon dissolution, 

liquidation or winding up of Fannie Mae to which they are entitled pursuant to paragraphs (a), 

(b) and (c) of this Section 4, the Holders of Series P Preferred Stock will not be entitled to any 

further participation in any distribution of assets by Fannie Mae. 

5. No Conversion or Exchange Rights. 

The Holders of shares of Series P Preferred Stock will not have any rights to convert such 

shares into or exchange such shares for shares of any other class or classes, or of any other series 

of any class or classes, of stock or obligations of Fannie Mae. 

6. No Pre-Emptive Rights. 

No Holder of Series P Preferred Stock shall be entitled as a matter of right to subscribe 

for or purchase, or have any pre-emptive right with respect to, any part of any new or additional 

issue of stock of any class whatsoever, or of securities convertible into any stock of any class 

whatsoever, or any other shares, rights, options or other securities of any class whatsoever, 

whether now or hereafter authorized and whether issued for cash or other consideration or by 

way of dividend. 

7. Voting Rights; Amendments. 

(a) Except as provided below, the Holders of Series P Preferred Stock will not be entitled 

to any voting rights, either general or special. 

(b) Without the consent of the Holders of Series P Preferred Stock, Fannie Mae will have 

the right to amend, alter, supplement or repeal any terms of this Certificate or the Series P 

Preferred Stock (1) to cure any ambiguity, or to cure, correct or supplement any provision 

contained in this Certificate of Designation that may be defective or inconsistent with any other 

provision herein or (2) to make any other provision with respect to matters or questions arising 

with respect to the Series P Preferred Stock that is not inconsistent with the provisions of this 

Certificate of Designation so long as such action does not materially and adversely affect the 

interests of the Holders of Series P Preferred Stock; provided, however, that any increase in the 

amount of authorized or issued Series P Preferred Stock or the creation and issuance, or an 

increase in the authorized or issued amount, of any other class or series of stock of Fannie Mae, 

whether ranking prior to, on a parity with or junior to the Series P Preferred Stock, as to the 

payment of dividends or the distribution of assets upon dissolution, liquidation or winding up of 

Fannie Mae, or otherwise, will not be deemed to materially and adversely affect the interests of 

the Holders of Series P Preferred Stock. 

(c) Except as set forth in paragraph (b) of this Section 7, the terms of this Certificate or 

the Series P Preferred Stock may be amended, altered, supplemented, or repealed only with the 

consent of the Holders of at least two-thirds of the shares of Series P Preferred Stock then 

outstanding, given in person or by proxy, either in writing or at a meeting of stockholders at 

which the Holders of Series P Preferred Stock shall vote separately as a class. On matters 

requiring their consent, Holders of Series P Preferred Stock will be entitled to one vote per share. 

6
(d) The rules and procedures for calling and conducting any meeting of Holders 

(including, without limitation, the fixing of a record date in connection therewith), the 

solicitation and use of proxies at such a meeting, the obtaining of written consents, and any other 

aspect or matter with regard to such a meeting or such consents shall be governed by any rules 

that the Board of Directors of Fannie Mae, or a duly authorized committee thereof, in its 

discretion, may adopt from time to time, which rules and procedures shall conform to the 

requirements of any national securities exchange on which the Series P Preferred Stock are listed 

at the time (if so listed). 

8. Additional Classes or Series of Stock. 

The Board of Directors of Fannie Mae, or a duly authorized committee thereof, shall 

have the right at any time in the future to authorize, create and issue, by resolution or resolutions, 

one or more additional classes or series of stock of Fannie Mae, and to determine and fix the 

distinguishing characteristics and the relative rights, preferences, privileges and other terms of 

the shares thereof. Any such class or series of stock may rank prior to, on a parity with or junior 

to the Series P Preferred Stock as to the payment of dividends or the distribution of assets upon 

dissolution, liquidation or winding up of Fannie Mae, or otherwise. 

9. Priority. 

For purposes of this Certificate of Designation, any stock of any class or series of Fannie 

Mae shall be deemed to rank: 

(a) Prior to the shares of Series P Preferred Stock, either as to the payment of dividends 

or the distribution of assets upon dissolution, liquidation or winding up of Fannie Mae, if the 

holders of such class or series shall be entitled to the receipt of dividends or of amounts 

distributable upon dissolution, liquidation or winding up of Fannie Mae, as the case may be, in 

preference or priority to the Holders of shares of Series P Preferred Stock. 

(b) On a parity with shares of Series P Preferred Stock, either as to the payment of 

dividends or the distribution of assets upon dissolution, liquidation or winding up of Fannie Mae, 

whether or not the dividend rates or amounts, dividend payment dates or redemption or 

liquidation prices per share, if any, be different from those of the Series P Preferred Stock, if the 

holders of such class or series shall be entitled to the receipt of dividends or of amounts 

distributable upon dissolution, liquidation or winding up of Fannie Mae, as the case may be, in 

proportion to their respective dividend rates or amounts or liquidation prices, without preference 

or priority, one over the other, as between the holders of such class or series and the Holders of 

shares of Series P Preferred Stock. 

(c) Junior to shares of Series P Preferred Stock, either as to the payment of dividends or 

the distribution of assets upon dissolution, liquidation or winding up of Fannie Mae, if such class 

shall be common stock of Fannie Mae or if the Holders of shares of Series P Preferred Stock 

shall be entitled to the receipt of dividends or of amounts distributable upon dissolution, 

liquidation or winding up of Fannie Mae, as the case may be, in preference or priority over the 

holders of such class or series. 

7
(d) The shares of Preferred Stock of Fannie Mae designated “5.25% Non-Cumulative 

Preferred Stock, Series D” (the “Series D Preferred Stock”), “5.10% Non-Cumulative Preferred 

Stock, Series E” (the “Series E Preferred Stock”), “Variable Rate Non-Cumulative Preferred 

Stock, Series F” (the “Series F Preferred Stock”), “Variable Rate Non-Cumulative Preferred 

Stock, Series G” (the “Series G Preferred Stock”), “5.81% Non-Cumulative Preferred Stock, 

Series H” (the “Series H Preferred Stock”) , “5.375% Non-Cumulative Preferred Stock, Series I” 

(the “Series I Preferred Stock”), “5.125% Non-Cumulative Preferred Stock, Series L” (the 

“Series L Preferred Stock”), 4.75% Non-Cumulative Preferred Stock, Series M (the “Series M 

Preferred Stock”), the 5.50% Non-Cumulative Preferred Stock, Series N (the “Series N Preferred 

Stock”), the Non-Cumulative Preferred Stock, Series O (the “Series O Preferred Stock”), and the 

“Non-Cumulative Convertible Series 2004-1 Preferred Stock” (the “Series 2004-1 Preferred 

Stock”) shall be deemed to rank on a parity with shares of Series P Preferred Stock as to the 

payment of dividends and the distribution of assets upon dissolution, liquidation or winding up 

of Fannie Mae. Accordingly, the holders of record of Series D Preferred Stock, the holders of 

record of Series E Preferred Stock, the holders of record of Series F Preferred Stock, the holders 

of record of Series G Preferred Stock, the holders of record of Series H Preferred Stock, the 

holders of record of Series I Preferred Stock, the holders of record of Series L Preferred Stock, 

the holders of record of Series M Preferred Stock, the holders of record of Series N Preferred 

Stock, the holders of record of Series 2004-1 Preferred Stock, the holders of record of Series O 

Preferred Stock and the Holders of the Series P Preferred Stock shall be entitled to the receipt of 

dividends and of amounts distributable upon dissolution, liquidation or winding up of Fannie 

Mae, as the case may be, in proportion to their respective dividend rates or amounts or 

liquidation prices, without preference or priority, one over the other. 

10. Transfer Agent, Dividend Disbursing Agent and Registrar. 

Fannie Mae hereby appoints Computershare Trust Company, N.A., as its initial transfer 

agent, dividend disbursing agent and registrar for the Series P Preferred Stock. Fannie Mae may 

at any time designate an additional or substitute transfer agent, dividend disbursing agent and 

registrar for the Series P Preferred Stock. 

11. Notices. 

Any notice provided or permitted by this Certificate of Designation to be made upon, or 

given or furnished to, the Holders of Series P Preferred Stock by Fannie Mae shall be made by 

first-class mail, postage prepaid, to the addresses of such Holders as they appear on the books 

and records of Fannie Mae or by other written or electronic means to designated accounts of 

such Holders. Such notice shall be deemed to have been sufficiently made upon deposit thereof 

in the United States mail or electronic transmission to a designated account of the Holder. 

Notwithstanding anything to the contrary contained herein, in the case of the suspension of 

regular mail service or by reason of any other cause it shall be impracticable, in Fannie Mae’s 

judgment, to give notice by mail, or if Fannie Mae has reason to believe other notification means 

would be ineffective, then such notification may be made, in Fannie Mae’s discretion, by 

publication in a newspaper of general circulation in The City of New York or by hand delivery 

to the addresses of Holders as they appear on the books and records of Fannie Mae. 

8
Receipt and acceptance of a share or shares of the Series P Preferred Stock by or on behalf of a 

Holder shall constitute the unconditional acceptance by such Holder (and all others having beneficial 

ownership of such share or shares) of all of the terms and provisions of this Certificate of Designation. No 

signature or other further manifestation of assent to the terms and provisions of this Certificate of 

Designation shall be necessary for its operation or effect as between Fannie Mae and the Holder (and all such 

others). 

9