- Slower Growth Expected for First Half of 2012 Compared to Fourth
     Quarter of 2011; Second-Half Growth Projected to Trend Modestly Higher
  
       - Housing Sector Showing Incremental Improvement Due to Modest Pick-Up
                                   in Employment

    Fiscal policy issues and political economic uncertainty will take center 
stage in determining the degree of consumer and business activity - key drivers 
of economic growth - during 2012, according to Fannie Mae's (OTC Bulletin 
Board: FNMA) Economics & Mortgage Market Analysis Group. The forthcoming 
presidential election, potential expiration of tax provisions for businesses 
and households, and the ongoing healthcare debate are among the uncertainties 
expected to keep the economy moving at a moderate pace with growth of 2.3 
percent expected for the year. Moreover, contagion effects from the sovereign 
debt crisis in the euro zone, which appears to be slipping into recession, are 
expected to remain as a primary risk to growth in 2012.

    Consumers seem to have gotten out of their summer rut due in large part to 
improving labor market conditions and improving attitudes toward employment 
prospects and future income. As consumer sentiment shows signs of improvement, 
so do recent housing indicators, which are trending in a positive direction 
with incremental improvement expected to continue throughout 2012 - albeit only 
modestly initially, and moving from historic lows.

    "We're entering 2012 with decent momentum, especially on the employment 
side, which is fostering positive household and consumer behavior. 
Unfortunately, we expect this momentum to slow as we move through the first 
half of the year," said Fannie Mae Chief Economist Doug Duncan. "2012 will be 
replete with policy changes and challenges that involve the global economy, the 
domestic economy, and the housing sector. We expect the net effect will be a 
year of moderate growth edging away from the 2011 threat of a double dip."

    For an audio synopsis of the January 2012 Economic Outlook, listen to the 
podcast on the Economics & Mortgage Market Analysis 
[http://www.fanniemae.com/portal/research-and-analysis/emma.html? ] site at
http://www.fanniemae.com. Visit the site to read the full January 2012 Economic
Outlook, including the Economic Developments Commentary, Economic Forecast, 
Housing Forecast, and Multifamily Market Commentary.

    Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's 
Economics & Mortgage Market Analysis (EMMA) Group included in these materials 
should not be construed as indicating Fannie Mae's business prospects or 
expected results, are based on a number of assumptions, and are subject to 
change without notice. How this information affects Fannie Mae will depend on 
many factors. Although the EMMA Group bases its opinions, analyses, estimates, 
forecasts, and other views on information it considers reliable, it does not 
guarantee that the information provided in these materials is accurate, current,
or suitable for any particular purpose. Changes in the assumptions or the 
information underlying these views could produce materially different results. 
The analyses, opinions, estimates, forecasts, and other views published by the 
EMMA Group represent the views of that group as of the date indicated and do 
not necessarily represent the views of Fannie Mae or its management.

    Fannie Mae exists to expand affordable housing and bring global capital to 
local communities in order to serve the U.S. housing market. Fannie Mae has a 
federal charter and operates in America's secondary mortgage market to enhance 
the liquidity of the mortgage market by purchasing or guaranteeing mortgage 
loans originated by mortgage bankers and other lenders so that they may lend to 
home buyers. Our job is to help those who house America.

    Follow us on Twitter: http://twitter.com/FannieMae


SOURCE: Fannie Mae

    CONTACT: Pete Bakel, 
             +1-202-752-2034