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Exhibit 4.11

CERTIFICATE OF DESIGNATION OF TERMS OF

NON-CUMULATIVE PREFERRED STOCK, SERIES O

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 “Non-Cumulative Preferred Stock, Series O” (the “Series O Preferred Stock”), and the number of shares initially constituting the Series O Preferred Stock is 50,000,000. Shares of Series O Preferred Stock will have no par value and a stated value and liquidation preference of $50 per share. 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 O Preferred Stock, provided such reduction is not below the number of shares of Series O Preferred Stock then outstanding.

2. Dividends.

(a) Holders of record of Series O 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 March 31, 2005. 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 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 may not be earlier than 45 days or later than 10 days prior to the applicable Dividend Payment Date.

If declared, the initial dividend, which will be for the period from and including the date of issuance to but excluding March 31, 2005, will be 7.000% per annum, or $0.8847 per share. Thereafter, if declared, quarterly dividends will accrue at a variable per annum rate equal to the greater of (1) 7.000% and (2) the sum of the Ten Year CMT Rate (as defined below) applicable to such quarterly period plus 2.375%. On March 31, 2005 and each June 30, September 30, December 31 and March 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), the Ten Year CMT Rate for such Dividend Period will be calculated by Fannie Mae on the second Business Day immediately preceding the first day of such Dividend Period ( each a “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, December 30, 2004) to but excluding such Dividend Payment Date. If Fannie Mae redeems the Series O 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 O Preferred Stock for any period greater or less than a full Dividend Period will be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of dividends per share payable at redemption will be rounded to the fourth digit after the decimal point. Dividends payable on the Series O Preferred Stock for each full Dividend Period will be computed by dividing the per annum dividend rate by four. The amount of quarterly dividends per share will be calculated by multiplying the preceding rate by the stated value per share of $50, the product of which 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.)


 

The “Ten Year CMT Rate” for any Determination Date with respect to any Dividend Period will be the rate equal to (in the following order of priority):

(1) the one-week average yield on 10-year United States Treasury securities at “constant maturity” as estimated from the United States Department of the Treasury’s weekly yield curve, as published in the latest H.15(519) (as defined below) available on the applicable Determination Date with respect to such Dividend Period, provided that such H.15(519) was first available not earlier than ten calendar days before such Determination Date, under the column “Week Ending” for the week most recently ended opposite the heading “U.S. government securities-Treasury Constant Maturities, 10-year.”

(2) if the latest H.15(519) available on the applicable Determination Date with respect to such Dividend Period was first available prior to ten calendar days before such Determination Date, the Ten Year CMT Rate will be such 10-year United States Treasury constant maturity rate (or other 10-year United States Treasury rate) for such Determination Date as may then be published by either the Board of Governors of the Federal Reserve System or the United States Department of the Treasury that Fannie Mae determines to be comparable to the rate formerly published in H.15(519).

(3) if the Ten Year CMT Rate as described in clause (2) is not published by 10:00 a.m. (New York City time) on the applicable Determination Date, the Ten Year CMT Rate will be calculated by Fannie Mae and will be a yield to maturity (expressed as a bond equivalent and as a decimal on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 p.m. (New York City time) on such Determination Date of three leading primary United States government securities dealers in The City of New York selected by Fannie Mae (from five such dealers and 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)) for direct noncallable fixed rate obligations of the United States (“Treasury Notes”) most recently issued with an original maturity of approximately 10 years and a remaining term to maturity of not less than nine years. If three or four (and not five) of such dealers are quoting as described in this clause (3), then the Ten Year CMT Rate will be based on the arithmetic mean of the bid prices obtained and neither the highest nor lowest of such quotations will be eliminated.

(4) if fewer than three dealers selected by Fannie Mae are quoting as described in clause (3), the Ten Year CMT Rate will be calculated by Fannie Mae and will be a yield to maturity (expressed as a bond equivalent and as a decimal on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 p.m. (New York City time) on the applicable Determination Date of three leading


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