Fannie Mae has announced a 50% reduction in its common stock dividend, from $0.52 per share to $0.26, for the first quarter to "accelerate an increase in the company's capital."The government-sponsored enterprise noted that its regulator, the Office of Federal Housing Enterprise Oversight, had classified Fannie Mae as "significantly undercapitalized," requiring approval by the OFHEO director before the payment of any dividends. (The announced dividends have been approved by OFHEO.) The common stock dividend will be paid Feb. 25 to registered stockholders as of the close of business on Jan. 31, 2005. Preferred stock dividends announced by Fannie Mae are as follows: $0.65625 per share of series D; $0.63750 per share of series E; $0.1713 per share of series F; $0.2938 per share of series G; $0.7263 per share of series H; $0.6719 per share of series I; $0.5895 per share of series J; $0.6406 per share of series L; $0.5938 per share of series M; $0.6875 per share of series N; $0.8847 per share of series O; and $1,358.68 per share of convertible series 2004-1. For series K preferred stock, the dividend rate will be replaced on March 18 by the applicable swap rate plus 1.33%. All the preferred dividends will be paid March 31 to registered stockholders as of the close of business on March 15, 2005. Fannie Mae can be found online at http://www.fanniemae.com.

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