Bear, Stearns & Co. Inc.

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1 Supplement (To Prospectus Supplement dated September 16, 2005) $1,330,781,330 Guaranteed REMIC Pass-Through CertiÑcates Fannie Mae REMIC Trust This is a supplement to the prospectus supplement dated September 16, 2005 (the ""Prospectus Supplement''). If we use a capitalized term in this supplement without deñning it, you will Ñnd the deñnition of that term in the Prospectus Supplement. Notwithstanding anything set forth on the cover of the Prospectus Supplement, the Final Distribution Date for the WA class is November 2035 and the original class balances of the Group 5 Classes are as follows: WA ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $161,787,000 XA ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,161,549 Notwithstanding anything set forth on pages S-7 or S-19 of the Prospectus Supplement, the assumed characteristics of the Mortgage Loans underlying the Group 5 MBS as of the Issue Date are as follows: Approximate Approximate Original Weighted Average Remaining Weighted Average Approximate Approximate Term to Maturity Term to Maturity Loan Age Weighted Average Principal Balance (in months) (in months) (in months) Coupon $163,948, % Notwithstanding anything set forth on page S-23 of the Prospectus Supplement, during the initial Interest Accrual Period, the A and B Classes will bear interest at the annual rates of approximately % and %, respectively. Notwithstanding anything set forth on pages S-12 and S-43 of the Prospectus Supplement, the weighted average lives and the Decrement Tables for the WA, XA, A and B Classes are as set forth below: WA Class XA Class A Class B Class PSA Prepayment Assumption PSA Prepayment Assumption PSA Prepayment Assumption PSA Prepayment Assumption Date 0% 300% 600% 900% 1200% 0% 300% 600% 900% 1200% 0% 300% 600% 900% 1200% 0% 300% 600% 900% 1200% Initial PercentÏÏÏÏÏÏÏÏÏ November 2006ÏÏÏÏÏÏÏÏ November 2007ÏÏÏÏÏÏÏÏ November 2008ÏÏÏÏÏÏÏÏ November 2009ÏÏÏÏÏÏÏÏ November 2010ÏÏÏÏÏÏÏÏ November 2011ÏÏÏÏÏÏÏÏ * November 2012ÏÏÏÏÏÏÏÏ November 2013ÏÏÏÏÏÏÏÏ November 2014ÏÏÏÏÏÏÏÏ * * November 2015ÏÏÏÏÏÏÏÏ * * * * November 2016ÏÏÏÏÏÏÏÏ * * November 2017ÏÏÏÏÏÏÏÏ * * November 2018ÏÏÏÏÏÏÏÏ * * * November 2019ÏÏÏÏÏÏÏÏ * * * * November 2020ÏÏÏÏÏÏÏÏ * * * * November 2021ÏÏÏÏÏÏÏÏ * * * * November 2022ÏÏÏÏÏÏÏÏ * * * * November 2023ÏÏÏÏÏÏÏÏ * * 66 * * * November 2024ÏÏÏÏÏÏÏÏ 64 * * 0 63 * * 0 November 2025ÏÏÏÏÏÏÏÏ * * 0 November 2026ÏÏÏÏÏÏÏÏ * * * 0 November 2027ÏÏÏÏÏÏÏÏ * * * * 0 November 2028ÏÏÏÏÏÏÏÏ * * * * 0 November 2029ÏÏÏÏÏÏÏÏ * * * * 0 November 2030ÏÏÏÏÏÏÏÏ * * * * 0 November 2031ÏÏÏÏÏÏÏÏ * * * * 0 November 2032ÏÏÏÏÏÏÏÏ * * * * 0 November 2033ÏÏÏÏÏÏÏÏ * * 0 0 November 2034ÏÏÏÏÏÏÏÏ * * 0 0 November 2035ÏÏÏÏÏÏÏÏ Weighted Average Life (years)** ÏÏÏÏÏÏ (continued on next page) Carefully consider the risk factors starting on page S-13 of the Prospectus Supplement and on page 10 of the REMIC Prospectus. Unless you understand and are able to tolerate these risks, you should not invest in the certiñcates. The certiñcates, together with any interest thereon, are not guaranteed by the United States and do not constitute a debt or obligation of the United States or any of its agencies or instrumentalities other than Fannie Mae. The certiñcates are exempt from registration under the Securities Act of 1933 and are ""exempted securities'' under the Securities Exchange Act of Bear, Stearns & Co. Inc. The date of this Supplement is November 29, 2005

2 Finally, the information set forth below replaces the information with respect to Recombinations 10 and 11 appearing on pages A-2 and A-3 of the Prospectus Supplement. Available Recombinations(1)(2) REMIC CertiÑcates RCR CertiÑcates Original Original Final Principal RCR Principal Interest Interest Principal CUSIP Distribution Classes Balances Class Balance Rate Type(3) Type(3) Number Date Recombination 10 XA $ 2,161,549 B(4) $ 6,060,487 (5) WAC SEQ 31394U6 Q 0 December 2035 XB 3,898,938 Recombination 11 WA $161,787,000 A(6) $333,159,000 (7) WAC SEQ 31394U6 P 2 November 2035 WB 171,372,000 (1) In any exchange under Recombination 10 or 11, the relative proportions of the REMIC CertiÑcates to be delivered (or if applicable, received) in such exchange will equal the proportions reöected by the outstanding principal balances of the related REMIC Classes at the time of exchange. (2) If, as a result of a proposed exchange, a CertiÑcateholder would hold a REMIC CertiÑcate or RCR CertiÑcate of a Class in an amount less than the applicable minimum denomination for that Class, the CertiÑcateholder will be unable to eåect the proposed exchange. See ""Description of the CertiÑcatesÌGeneralÌAuthorized Denominations'' in this prospectus supplement. (3) See ""Description of CertiÑcatesÌClass DeÑnitions and Abbreviations'' in the REMIC Prospectus and ""Description of the CertiÑcatesÌDistributions of Interest'' and ""ÌDistributions of Principal'' same proportionate relationship as that borne by the original balances of the related Classes. (4) The B Class is formed from a combination of the XA Class in Group 5 and the XB Class in Group 6. (5) During each Interest Accrual Period, the RCR CertiÑcates of this Class will bear interest at an annual rate equal to the weighted average of the interest rates of the XA and XB Classes, weighted on the basis of their principal balances (after giving eåect to all payments on those Classes during that Interest Accrual Period). (6) The A Class is formed from a combination of the WA Class in Group 5 and the WB Class in Group 6. (7) During each Interest Accrual Period, the RCR CertiÑcates of this Class will bear interest at an annual rate equal to the weighted average of the interest rates of the WA and WB Classes, weighted on the basis of their principal balances (after giving eåect to all payments on those Classes during that Interest Accrual Period).

3 Prospectus Supplement (To REMIC Prospectus dated May 1, 2002) $1,332,718,919 Guaranteed REMIC Pass-Through CertiÑcates Fannie Mae REMIC Trust The CertiÑcates Original Final Class Principal Interest Interest CUSIP Distribution We, the Federal National Mortgage Association Class Group Balance Type Rate Type Number Date (Fannie Mae), will issue the classes of certiñ- AC ÏÏÏÏ 1 $ 1,154,000 TAC/AD 5.5% FIX 31394U4J8 December 2035 cates listed in the chart on this page. AE ÏÏÏÏ 1 21,894,000 PAC 5.5 FIX 31394U4K5 December 2035 AF ÏÏÏÏ 1 103,333,333 PT (1) FLT 31394U4L3 December 2035 AI ÏÏÏÏ 1 103,333,333(2) NTL (1) INV/IO 31394U4M1 December 2035 Payments to CertiÑcateholders AZ ÏÏÏÏ 1 25,000 TAC/AD 5.5 FIX/Z 31394U4N9 December 2035 We will make monthly payments on the certiñ- FA ÏÏÏÏ 1 96,405,571 PAC/AD (1) FLT 31394U4P4 November 2035 cates. You, the investor, will receive HF(3) 1 41,231,667 TAC/AD (1) FLT 31394U4Q2 December 2035 HS(3) 1 11,245,000 TAC/AD (1) INV 31394U4R0 December 2035 interest accrued on the balance of your certiñ- NO(3) 1 26,292,429 PAC/AD (4) PO 31394U4S8 November 2035 cate (except in the case of the accrual clas- SY(3) 1 26,292,429(2) NTL (1) INV/IO 31394U4T6 November 2035 ses), and Z ÏÏÏÏ 1 8,119,000 SUP 5.5 FIX/Z 31394U4U3 December 2035 principal to the extent available for payment ZA ÏÏÏÏ 1 300,000 PAC 5.5 FIX/Z 31394U4V1 December 2035 on your class. CD ÏÏÏÏ 2 57,706,000 SC/PAC 4.5 FIX 31394U4W9 April 2022 CE(3) 2 16,701,000 SC/PAC 4.5 FIX 31394U4X7 April 2022 We may pay principal at rates that vary from CG ÏÏÏÏ 2 55,000 SC/SUP 4.5 FIX 31394U4Y5 April 2022 time to time. We may not pay principal to BA ÏÏÏÏ 3 37,473,689 SC/TAC/AD 5.5 FIX 31394U4Z2 May 2019 certain classes for long periods of time. BO ÏÏÏÏ 3 6,179,427 SC/PT (4) PO 31394U5A6 November 2035 IB ÏÏÏÏ 3 3,406,699(2) NTL 5.5 FIX/IO 31394U5B4 May 2019 The Fannie Mae Guaranty ZB ÏÏÏÏ 3 7,500,000 SC/CPT/SUP 6.0 FIX/Z 31394U5C2 November 2035 ZC(3) 3 15,500,000 SC/TAC/AD 6.0 FIX/Z 31394U5D0 November 2035 We will guarantee that required payments of ZD(3) 3 7,500,000 SC/TAC/AD 6.0 FIX/Z 31394U5E8 November 2035 principal and interest on the certiñcates are AS(3) 4 3,095,570 SUP (1) INV 31394U5F5 February 2035 distributed to investors on time. AT(3) 4 24,900,000 SEG(PAC)/PAC 5.5 FIX 31394U5G3 December 2035 AU(3) 4 1,669,000 SEG(PAC)/SUP 5.5 FIX 31394U5H1 December 2035 The Trust and its Assets FB ÏÏÏÏ 4 100,000,000 SUP (1) FLT 31394U5J7 December 2035 The trust will own GS(3) 4 15,899,975 SUP (1) INV 31394U5K4 February 2035 IC(3)ÏÏ 4 47,495,000(2) NTL 5.5 FIX/IO 31394U5L2 June 2034 KD ÏÏÏÏ 4 30,515,000 PAC 5.5 FIX 31394U5M0 October 2029 Fannie Mae MBS and KE ÏÏÏÏ 4 67,238,000 PAC 5.5 FIX 31394U5N8 September 2032 underlying REMIC and RCR certiñcates KI(3) 4 16,919,636(2) NTL 5.5 FIX/IO 31394U5P3 February 2028 backed by Fannie Mae MBS. KZ ÏÏÏÏ 4 23,607,000 PAC 5.5 FIX/Z 31394U5Q1 December 2035 LB(3) 4 186,116,000 PAC 5.0 FIX 31394U5R9 February 2028 The mortgage loans underlying the Fannie Mae OG(3) 4 47,495,000 PAC (4) PO 31394U5S7 June 2034 MBS are Ñrst lien, single-family, Ñxed-rate SG ÏÏÏÏ 4 5,242,215 SUP (1) INV 31394U5T5 December 2035 loans. T ÏÏÏÏ 4 3,034,967 SUP (1) INV 31394U5U2 December 2035 VA ÏÏÏÏ 4 19,218,000 PAC/AD 5.5 FIX 31394U5V0 November 2016 If you own certiñcates of certain classes, you can VB ÏÏÏÏ 4 4,916,000 PAC/AD 5.5 FIX 31394U5W8 November 2018 exchange them for the corresponding RCR certiñcates to be issued at the time of the exchange. WA(3) 5 161,992,000 SEQ 5.5 FIX 31394U5X6 September 2035 The SA, AB, OC, CL, CJ, ZK, BC, KG, SD, KC, XA(3) 5 3,894,138 SEQ 5.5 FIX 31394U5Y4 December 2035 B and A Classes are the RCR classes, as further WB(3) 6 171,372,000 SEQ 5.0 FIX 31394U5Z1 September 2035 described in this prospectus supplement. XB(3) 6 3,898,938 SEQ 5.0 FIX 31394U6A5 December 2035 R ÏÏÏÏ 0 NPR 0 NPR 31394U6B3 December 2035 The dealer will oåer the certiñcates from time to RL ÏÏÏÏ 0 NPR 0 NPR 31394U6C1 December 2035 time in negotiated transactions at varying prices. We expect the settlement date to be Novem- (1) Based on LIBOR. (3) Exchangeable classes. ber 30, (2) Notional balances. These classes are interest only classes. (4) Principal only classes. Carefully consider the risk factors starting on page S-13 of this prospectus supplement and on page 10 of the REMIC prospectus. Unless you understand and are able to tolerate these risks, you should not invest in the certiñcates. You should read the REMIC prospectus as well as this prospectus supplement. The certiñcates, together with interest thereon, are not guaranteed by the United States and do not constitute a debt or obligation of the United States or any agency or instrumentality thereof other than Fannie Mae. The certiñcates are exempt from registration under the Securities Act of 1933 and are ""exempted securities'' under the Securities Exchange Act of Bear, Stearns & Co. Inc. The date of this Prospectus Supplement is September 16, 2005

4 TABLE OF CONTENTS Page AVAILABLE INFORMATION ÏÏÏÏÏÏÏÏ S- 3 ZC Accrual AmountÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-27 INCORPORATION BY REFERENCE S- 3 ZD Accrual Amount ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-27 RECENT DEVELOPMENTS ÏÏÏÏÏÏÏÏÏ S- 4 Group 3 Cash Flow Distribution REFERENCE SHEET ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S- 7 Amount and ZB1 and ZB2 ADDITIONAL RISK FACTORS ÏÏÏÏÏÏ S-13 Accrual Amounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-27 DESCRIPTION OF THE Group 4 Principal Distribution Amount S-27 CERTIFICATESÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-15 KZ Accrual Amount ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-27 GENERAL ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-15 Group 4 Cash Flow Distribution Structure ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-15 Amount ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-28 Fannie Mae Guaranty ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-16 Group 5 Principal Distribution Amount S-28 Characteristics of CertiÑcates ÏÏÏÏÏÏÏÏ S-16 Group 6 Principal Distribution Amount S-29 Authorized Denominations ÏÏÏÏÏÏÏÏÏÏ S-16 STRUCTURING ASSUMPTIONS ÏÏÏÏÏÏÏÏÏÏÏ S-29 Distribution Dates ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-17 Pricing Assumptions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-29 Record Date ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-17 Prepayment Assumptions ÏÏÏÏÏÏÏÏÏÏÏ S-29 Class FactorsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-17 Structuring Ranges and Rates ÏÏÏÏÏÏÏ S-29 No Optional Termination ÏÏÏÏÏÏÏÏÏÏÏ S-17 Initial EÅective Ranges ÏÏÏÏÏÏÏÏÏÏÏÏÏ S-30 Voting the Underlying REMIC YIELD TABLES ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-31 CertiÑcatesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-17 GeneralÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-31 COMBINATION AND RECOMBINATION ÏÏÏÏ S-17 The Fixed Rate Interest Only GeneralÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-17 Classes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-31 ProceduresÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-17 The Principal Only Classes ÏÏÏÏÏÏÏÏÏÏ S-32 Additional Considerations ÏÏÏÏÏÏÏÏÏÏÏ S-18 The Inverse Floating Rate Classes ÏÏÏÏ S-33 BOOK-ENTRY PROCEDURES ÏÏÏÏÏÏÏÏÏÏÏÏ S-18 WEIGHTED AVERAGE LIVES OF THE GeneralÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-18 CERTIFICATES ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-36 Method of PaymentÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-19 DECREMENT TABLESÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-36 THE TRUST MBSÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-19 CHARACTERISTICS OF THE R AND THE UNDERLYING REMIC RL CLASSES ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-44 CERTIFICATES ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-20 CERTAIN ADDITIONAL FEDERAL FINAL DATA STATEMENT ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-20 INCOME TAX CONSEQUENCES ÏÏ S-45 DISTRIBUTIONS OF INTEREST ÏÏÏÏÏÏÏÏÏÏ S-21 U.S. TREASURY CIRCULAR 230 NOTICE S-45 Categories of Classes and Components S-21 REMIC ELECTIONS AND SPECIAL TAX ComponentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-21 ATTRIBUTES ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-45 GeneralÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-21 TAXATION OF BENEFICIAL OWNERS OF REGULAR CERTIFICATES Interest Accrual PeriodsÏÏÏÏÏÏÏÏÏÏÏÏÏ S-22 ÏÏÏÏÏÏÏÏÏÏÏÏÏ S-46 Accrual Classes and Components ÏÏÏÏÏ S-22 TAXATION OF BENEFICIAL OWNERS OF RESIDUAL CERTIFICATES ÏÏÏÏÏÏÏÏÏÏÏÏ S-46 Notional ClassesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-22 TAXATION OF BENEFICIAL OWNERS OF Floating Rate and Inverse Floating RCR CERTIFICATES ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-46 Rate Classes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-22 The Weighted Average Coupon GeneralÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-46 Classes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-23 Strip RCR Classes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-46 CALCULATION OF LIBOR ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-23 Combination RCR Classes ÏÏÏÏÏÏÏÏÏÏÏ S-48 DISTRIBUTIONS OF PRINCIPAL ÏÏÏÏÏÏÏÏÏÏ S-23 Exchanges ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-48 Categories of Classes and Components S-23 TAX RETURN DISCLOSURE ComponentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-24 REQUIREMENTS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-48 Principal Distribution AmountÏÏÏÏÏÏÏ S-24 PLAN OF DISTRIBUTION ÏÏÏÏÏÏÏÏÏÏÏ S-49 Group 1 Principal Distribution Amount S-25 GeneralÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-49 AZ Accrual Amount ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-25 Increase in CertiÑcates ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-49 ZA Accrual Amount ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-25 LEGAL MATTERS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-49 Group 1 Cash Flow Distribution EXHIBIT AÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A- 1 Amount and Z Accrual Amount ÏÏ S-25 SCHEDULE 1 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A- 2 Group 2 Principal Distribution Amount S-26 PRINCIPAL BALANCE Group 3 Principal Distribution Amount S-27 SCHEDULESÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ B- 1 S-2 Page

5 AVAILABLE INFORMATION You should purchase the certiñcates only if you have read and understood this prospectus supplement and the following documents (the ""Disclosure Documents''): our Prospectus for Fannie Mae Guaranteed REMIC Pass-Through CertiÑcates dated May 1, 2002 (the ""REMIC Prospectus''); our Prospectus for Fannie Mae Guaranteed Mortgage Pass-Through CertiÑcates (Single- Family Residential Mortgage Loans) dated July 1, 2004 (the ""MBS Prospectus''); if you are purchasing any Group 2 or Group 3 Classes or the R or RL Class, the disclosure documents relating to the applicable underlying REMIC or RCR certiñcates (the ""Underlying Disclosure Documents''); and any information incorporated by reference in this prospectus supplement as discussed below under the heading ""Incorporation by Reference.'' You can obtain copies of the Disclosure Documents by writing or calling us at: Fannie Mae MBS Helpline 3900 Wisconsin Avenue, N.W., Area 2H-3S Washington, D.C (telephone ). In addition, the Disclosure Documents, together with the class factors, are available on our corporate Web site at You also can obtain copies of the Disclosure Documents, except the Underlying Disclosure Documents, by writing or calling the dealer at: Bear, Stearns & Co. Inc. c/o ADP Financial Services Prospectus Department 1155 Long Island Avenue Edgewood, New York (telephone ). INCORPORATION BY REFERENCE In this prospectus supplement, we are incorporating by reference the MBS Prospectus and the Underlying REMIC Disclosure Document described above. In addition, we are incorporating by reference the documents listed below. This means that we are disclosing information to you by referring you to these documents. These documents are considered part of this prospectus supplement, so you should read this prospectus supplement, and any applicable supplements or amendments, together with these documents. You should rely only on the information provided or incorporated by reference in this prospectus supplement, the REMIC Prospectus and the MBS Prospectus and any applicable supplements or amendments. We incorporate by reference the following documents we have Ñled, or may Ñle, with the Securities and Exchange Commission (""SEC''): our Annual Report on Form 10-K for the Ñscal year ended December 31, 2003 (""Form 10-K''); all other reports we have Ñled pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 since the end of the Ñscal year covered by the Form 10-K until the date of this prospectus supplement, excluding any information ""furnished'' to the SEC on Form 8-K; and S-3

6 all proxy statements that we Ñle with the SEC and all documents that we Ñle with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 subsequent to the date of this prospectus supplement and prior to the completion of the oåering of the certiñcates, excluding any information we ""furnish'' to the SEC on Form 8-K. Any information incorporated by reference in this prospectus supplement is deemed to be modiñed or superseded for purposes of this prospectus supplement to the extent information contained or incorporated by reference in this prospectus supplement modiñes or supersedes such information. In such case, the information will constitute a part of this prospectus supplement only as so modiñed or superseded. We Ñle annual, quarterly and current reports, proxy statements and other information with the SEC. You can obtain copies of the periodic reports we Ñle with the SEC without charge by calling or writing our OÇce of Investor Relations, Fannie Mae, 3900 Wisconsin Avenue, NW, Washington, DC 20016, telephone: (202) The periodic and current reports that we Ñle with the SEC are also available on our Web site. Information appearing on our Web site is not incorporated in this prospectus supplement except as speciñcally stated in this prospectus supplement. In addition, you may read our SEC Ñlings and other information about Fannie Mae at the oçces of the New York Stock Exchange, the Chicago Stock Exchange and the PaciÑc Exchange. Our SEC Ñlings are also available at the SEC's Web site at You also may read and copy any document we Ñle with the SEC by visiting the SEC's Public Reference Room at 100 F Street, N.E., Washington, DC Please call the SEC at SEC-0330 for further information about the operation of the Public Reference Room. We are providing the address of the SEC's Web site solely for the information of prospective investors. Information appearing on the SEC's Web site is not incorporated in this prospectus supplement except as speciñcally stated in this prospectus supplement. RECENT DEVELOPMENTS On December 21, 2004, our Board of Directors (the ""Board'') announced the retirement of Chairman and Chief Executive OÇcer Franklin D. Raines and the resignation of Vice Chairman and Chief Financial OÇcer J. Timothy Howard. The Board further announced that the Audit Committee of the Board dismissed KPMG LLP as our independent auditor. On January 4, 2005, the Audit Committee of the Board approved the engagement of Deloitte & Touche LLP (""Deloitte'') as our independent auditor. Deloitte will serve as our auditor for each of the Ñscal years 2001, 2002, 2003 and Stephen B. Ashley, a member of the Board, currently is serving as the non-executive Chairman of the Board. On June 1, 2005, the Board announced that it had selected Daniel H. Mudd, the former Chief Operating OÇcer of Fannie Mae, to be the new President and Chief Executive OÇcer. Mr. Mudd had been serving as the interim Chief Executive OÇcer since the retirement of Mr. Raines. Executive Vice President Robert Levin currently is serving as the interim Chief Financial OÇcer. On December 15, 2004, the OÇce of the Chief Accountant of the Securities and Exchange Commission (""SEC'') issued a statement (the ""Statement'') regarding certain accounting issues relating to Fannie Mae, including determinations by the SEC that we should (i) restate our Ñnancial statements to eliminate the use of hedge accounting under Financial Accounting Standard No. 133, Accounting for Derivative Instruments and Hedging Activities (""FAS 133''), (ii) evaluate the accounting under Financial Accounting Standard No. 91, Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases (""FAS 91'') and restate our Ñnancial statements Ñled with the SEC if the amounts required for correction are material, and (iii) re-evaluate the information prepared under generally accepted accounting principles (""GAAP'') and non-gaap information that we previously provided to investors. On S-4

7 December 16, 2004, we Ñled a Current Report on Form 8-K with the SEC that includes a copy of the Statement. As a result of the SEC's Ñndings, we will restate our Ñnancial results from 2001 through June 30, 2004 to comply fully with the SEC's determination. In a Form 12b-25 Ñled with the SEC on November 15, 2004, we estimated that a loss of hedge accounting under FAS 133 for all derivatives could result in recording into earnings a net cumulative loss on derivative transactions of approximately $9.0 billion as of September 30, (We estimate that as of December 31, 2004, this net cumulative after-tax loss was approximately $8.4 billion.) We also stated that there would be a corresponding decrease to retained earnings and, accordingly, regulatory capital. In a Form 12b-25 Ñled with the SEC on March 17, 2005, we stated that if we do not qualify for hedge accounting for mortgage commitments accounted for as derivatives since our July 1, 2003 adoption of Financial Accounting Standard No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities (""FAS 149''), we estimate that we would be required to record in earnings a net cumulative after-tax loss related to these commitments of approximately $2.4 billion as of December 31, We are working to determine the eåect of the restatement, including the eåect on each prior reporting period. We expect that the impact will be material to our reported GAAP and core business results for many, if not all, periods and will vary substantially from period to period based on the amount and types of derivatives held and Öuctuations in interest rates and volatility. Our restated Ñnancial statements also will reöect corrections as a result of our misapplication of FAS 91 for each prior reporting period described above. We also will consider the impact, if any, of the SEC's decision on FAS 91 for periods prior to those described above. Accordingly, on December 17, 2004, the Audit Committee of the Board concluded that our previously Ñled interim and audited Ñnancial statements and the independent auditor's reports thereon for the periods from January 2001 through the second quarter of 2004 should no longer be relied upon because such Ñnancial statements were prepared applying accounting practices that did not comply with GAAP. We have not yet Ñled our quarterly reports on Form 10-Q for the quarters ended September 30, 2004, March 31, 2005 and June 30, 2005, or our annual report on Form 10-K for the year ended December 31, The Ñnancial information regarding our anticipated results of operations for the quarter ended September 30, 2004 that was contained in our Form 12b-25 Ñled on November 15, 2004 and in a Form 8-K Ñled on November 16, 2004 was prepared applying the same policies and practices, and, accordingly, should not be relied upon. The Audit Committee has discussed the matters described above and in a Form 8-K Ñled with the SEC on December 22, 2004 with KPMG LLP, our independent auditor through December 21, On September 20, 2004, the OÇce of Federal Housing Enterprise Oversight (""OFHEO'') delivered its report to the Board of its Ñndings to date of the agency's special examination. Among other matters, the OFHEO report raised a number of questions and concerns about our accounting policies and practices with respect to FAS 91 and FAS 133. On February 23, 2005, we announced that OFHEO notiñed our Board and management of several additional accounting and internal control issues and questions that OFHEO identiñed in its ongoing special examination, and directed that these matters be included in the internal reviews by the Board and management and reviewed by Deloitte. OFHEO indicated that it has not completed its review of all aspects of these issues, but has identiñed policies that it believes appear to be inconsistent with generally accepted accounting principles as well as internal control deñciencies that raise safety and soundness concerns. The issues and questions include the following areas: securities accounting, loan accounting, consolidations, accounting for commitments, and practices to smooth certain income and expense amounts. OFHEO also raised concerns regarding journal entry controls, systems limitations, and database modiñcations, as well as FAS 149 and new developments relating to FAS 91. A summary of the additional questions raised in OFHEO's ongoing special examination of Fannie Mae has been Ñled as an exhibit to a Form 8-K that we Ñled with the SEC on February 23, S-5

8 Our Board and management are addressing the issues and questions raised by OFHEO. In addition, the Board designated its Special Review Committee to review the Ñndings of OFHEO's September 2004 special examination report. This review, led by former Senator Warren Rudman of the law Ñrm of Paul, Weiss, Rifkind, Wharton & Garrison (""Paul Weiss''), is focused on: accounting issues, including accounting policies, procedures and controls regarding FAS 91 and FAS 133; organization, structure and governance, including Board oversight and management responsibilities and resources; and executive compensation. Paul Weiss' work continues as it examines these areas and other issues that may arise in the course of its review, reporting regularly to the Board. We will report to OFHEO regarding each of these issues and will continue to work with OFHEO to resolve these matters as part of our ongoing internal reviews and restatement process. In light of the foregoing, management has initiated a comprehensive review of accounting routines and controls, the Ñnancial reporting process and the application of GAAP, which will include the issues OFHEO has identiñed, as well as issues identiñed by management and/or Deloitte. Management, working with accounting consultants, will develop a view on these issues, which then will be reviewed with the Audit Committee, Deloitte and OFHEO. Upon conclusion of this review, our Ñnancial statements will be restated where necessary and submitted to Deloitte for review as part of its audit. We are providing periodic updates to the SEC and the New York Stock Exchange on the restatement. In addition, the SEC and the U.S. Attorney's OÇce for the District of Columbia are conducting ongoing investigations into these matters. OFHEO is required to review our capital classiñcation quarterly, and as of September 30, 2004 and December 31, 2004, classiñed us as ""signiñcantly undercapitalized.'' As a result of this classiñcation, we submitted a capital restoration plan to OFHEO in January 2005, and on February 23, 2005, we announced that OFHEO approved our proposed capital restoration plan. Under the plan, we detail how we expect to meet our minimum capital requirement on an ongoing basis, as well as achieve OFHEO's 30 percent surplus capital requirement by September 30, A summary of the capital restoration plan was Ñled as an exhibit to a Form 8-K that we Ñled with the SEC on February 23, On May 19, 2005, OFHEO classiñed us as ""adequately capitalized'' as of March 31, OFHEO has noted that this classiñcation is subject to revision pending the outcome of ongoing accounting reviews, and that this classiñcation does not amend any existing capital restoration plans currently in place between Fannie Mae and OFHEO. In a Form 12b-25 Ñled with the SEC on August 9, 2005, we reported that, based on our current assessment, we are not likely to complete and Ñle our Annual Report on Form 10-K for the year ended December 31, 2004, which will contain restated Ñnancial information, prior to the second half of We also reported in that Form 12b-25 that we are uncertain whether Deloitte will be able to opine on either the eåectiveness of our internal control over Ñnancial reporting or management's process for assessing the eåectiveness of internal control over Ñnancial reporting as of December 31, 2004 or December 31, We also reported in that Form 12b-25 that current NYSE listing standards allow the NYSE to continue to list the securities of a listed company for up to nine months after a company is delinquent in Ñling its Annual Report on Form 10-K (until December 16, 2005, in the case of Fannie Mae). The NYSE, in its sole discretion, also may extend the listing of a company's securities for another three months after that date, depending on the company's circumstances. Under the rules of the NYSE, Fannie Mae would have a right to a review of any decision to delist its securities by a committee of the NYSE Board of Directors. Forms 8-K that we Ñle with the SEC prior to the completion of the oåering of the certiñcates are incorporated by reference in this prospectus supplement. This means that we are disclosing information to you by referring you to those documents. You should refer to ""Incorporation by Reference'' above for further details on the information that we incorporate by reference in this prospectus supplement and where to Ñnd it. S-6

9 REFERENCE SHEET This reference sheet is not a summary of the transaction and does not contain complete information about the certiñcates. You should purchase the certiñcates only after reading this prospectus supplement and each of the additional disclosure documents listed on page S-3. Assets Underlying Each Group of Classes Group Assets 1 Group 1 MBS 2 Class JL REMIC CertiÑcate 3 Class YX RCR CertiÑcate Class AK RCR CertiÑcate Class BA REMIC CertiÑcate 4 Group 4 MBS 5 Group 5 MBS 6 Group 6 MBS Assumed Characteristics of the Mortgage Loans Underlying the Trust MBS (as of November 1, 2005) Approximate Approximate Original Weighted Average Weighted Approximate Approximate Term to Remaining Term Average Weighted Principal Maturity to Maturity Loan Age Average Balance (in months) (in months) (in months) Coupon Group 1 MBS $310,000, % Group 4 MBS $532,946, % Group 5 MBS $1165,886, % Group 6 MBS $175,270, % The actual remaining terms to maturity, weighted average loan ages and interest rates of most of the mortgage loans will diåer from the weighted averages shown above, perhaps signiñcantly. Characteristics of the Underlying REMIC and RCR CertiÑcates Exhibit A describes the underlying REMIC and RCR certiñcates, including certain information about the related mortgage loans. To learn more about the underlying REMIC and RCR certiñcates, you should obtain from us the current class factors and the related disclosure documents as described on page S-3. Class Factors The class factors are numbers that, when multiplied by the initial principal balance of a certiñcate, can be used to calculate the current principal balance of that certiñcate (after taking into account principal payments in the same month). We publish the class factors on or shortly after the 11th day of each month. Settlement Date We expect to issue the certiñcates on November 30, Distribution Dates We will make payments on the certiñcates on the 25th day of each calendar month, or on the next business day if the 25th day is not a business day. S-7

10 Book-Entry and Physical CertiÑcates We will issue the book-entry certiñcates through the U.S. Federal Reserve Banks and DTC, as applicable, which will electronically track ownership of the certiñcates and payments on them. We will issue physical certiñcates in registered, certiñcated form. We will issue the classes of certiñcates in the following forms: Fed Book-Entry DTC Book-Entry Physical All classes of certiñcates other than A and B R and RL Classes the A, B, R and RL Classes Exchanging CertiÑcates Through Combination and Recombination If you own certain certiñcates, you will be able to exchange them for a proportionate interest in the related RCR certiñcates as shown on Schedule 1. We will issue the RCR certiñcates upon such exchange. You can exchange your certiñcates by notifying us and paying an exchange fee. We use the principal and interest of the certiñcates exchanged to pay principal and interest on the related RCR certiñcates. Schedule 1 lists the available combinations of the certiñcates eligible for exchange and the related RCR certiñcates. Interest Rates During each interest accrual period, the Ñxed rate classes will bear interest at the applicable annual interest rates listed on the cover of this prospectus supplement or on Schedule 1. During each interest accrual period, the A and B Classes will bear interest at the applicable weighted average coupon rates described on Schedule 1. During the initial interest accrual period, the Öoating rate and inverse Öoating rate classes will bear interest at the initial interest rates listed below. During subsequent interest accrual periods, the Öoating rate and inverse Öoating rate will bear interest based on the formulas indicated below, but always subject to the speciñed maximum and minimum interest rates: Initial Maximum Minimum Formula for Interest Interest Interest Calculation of Class Rate Rate Rate Interest Rate(1) AF ÏÏÏÏÏÏ % % 0.35% LIBOR 35 basis points AI ÏÏÏÏÏÏ % % 0.00% 6.65% LIBOR FA ÏÏÏÏÏÏ % % 0.30% LIBOR 30 basis points HF ÏÏÏÏÏÏ % % 0.70% LIBOR 70 basis points HS ÏÏÏÏÏÏ % % 0.00% 23.1% ( LIBOR) SY ÏÏÏÏÏÏ % % 0.00% % ( LIBOR) AS ÏÏÏÏÏÏ % % 0.00% 144% (22.5 LIBOR) FB ÏÏÏÏÏÏ % % 0.60% LIBOR 60 basis points GS ÏÏÏÏÏÏ % % 0.00% % ( LIBOR) SG ÏÏÏÏÏÏ % % 0.00% % ( LIBOR) T ÏÏÏÏÏÏ % % 0.00% 64% (10 LIBOR) SA ÏÏÏÏÏÏ % % 0.00% % ( LIBOR) SD ÏÏÏÏÏÏ % % 0.00% % ( LIBOR) (1) We will establish LIBOR on the basis of the ""BBA Method.'' We will apply interest payments from exchanged REMIC certiñcates to the corresponding RCR certiñcates, on a pro rata basis, following any exchange. S-8

11 Notional Classes A notional class will not receive any principal. Its notional principal balance is the balance used to calculate accrued interest. The notional principal balances will equal the percentages of the outstanding balances speciñed below immediately before the related distribution date: Class AI ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ SY ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ IB ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ IC ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ KI ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100% of the AF Class 100% of the NO Class % of the BA Class 100% of the OG Class % of the LB Class Components The ZB Class is made up of payment components. Each component will have the original principal balance, principal type and interest type as set forth below. Original Principal Principal Balance Type Interest Type ZB1 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 75,000 SUP FIX/Z ZB2 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $7,425,000 SEQ FIX/Z Distributions of Principal Group 1 Principal Distribution Amount AZ Accrual Amount 1. To the HF and HS Classes, pro rata, to zero. 2. To the AC Class to zero. 3. Thereafter to the AZ Class. ZA Accrual Amount To the FA and NO Classes, pro rata, to zero, and thereafter to the ZA Class. Group 1 Cash Flow Distribution Amount and Z Accrual Amount (a) % of the Group 1 Cash Flow Distribution Amount to the AF Class to zero, and (b) % of the Group 1 Cash Flow Distribution Amount and, beginning with clause third, 100% of the Z Accrual Amount, as follows: Ñrst, to Aggregate Group I to its Planned Balance; second, to the AE Class to its Planned Balance; third, to Aggregate Group II to its Targeted Balance; fourth, to the Z Class to zero; Ñfth, to Aggregate Group II to zero; sixth, to the AE Class to zero; and seventh, to Aggregate Group I to zero. S-9

12 For a description of Aggregate Group I and Aggregate Group II, see ""Description of the CertiÑcates Ì Distributions of PrincipalÌGroup 1 Principal Distribution Amount'' in this prospectus supplement. Group 2 Principal Distribution Amount 1. To the CD Class to its Planned Balance. 2. To the CE Class to its Planned Balance. 3. To the CG Class to zero. 4. To the CE Class to zero. 5. To the CD Class to zero. Group 3 Principal Distribution Amount ZC Accrual Amount To the BA Class to zero, and thereafter to the ZC Class. ZD Accrual Amount To the BA and ZC Classes, in that order, to zero, and thereafter to the ZD Class. Group 3 Cash Flow Distribution Amount and ZB1 and ZB2 Accrual Amounts (a) % of the Group 3 Cash Flow Distribution Amount to the BO Class to zero, and (b) % of the Group 3 Cash Flow Distribution Amount, together with 100% of the ZB1 Accrual Amount and the ZB2 Accrual Amount, as follows: Ñrst, to Aggregate Group III to its Targeted Balance; second, to the ZB1 Component to zero; third, to Aggregate Group III to zero; and fourth, to the ZB2 Component to zero. For a description of Aggregate Group III, see ""Description of the CertiÑcates Ì Distributions of PrincipalÌGroup 3 Principal Distribution Amount''in this prospectus supplement. Group 4 Principal Distribution Amount KZ Accrual Amount To the VA and VB Classes, in that order, to zero, and thereafter to the KZ Class. Group 4 Cash Flow Distribution Amount 1. To Aggregate Group IV to its Planned Balance. 2. To Aggregate Group V to its Planned Balance. 3. (a) % of the remaining amount to the FB Class to zero, and (b) % of such remaining amount as follows: Ñrst, up to 99.5% of such amount, to the AS and GS Classes, pro rata, to zero; and second, to the T and SG Classes, pro rata, to zero. 4. To Aggregate Group V to zero. S-10

13 5. To Aggregate Group IV to zero. For a description of Aggregate Group IV and Aggregate Group V, see ""Description of the CertiÑcates Ì Distributions of PrincipalÌGroup 4 Principal Distribution Amount'' in this prospectus supplement. Group 5 Principal Distribution Amount To the WA and XA Classes, in that order, to zero. Group 6 Principal Distribution Amount To the WB and XB Classes, in that order, to zero. We will apply principal payments from exchanged REMIC certiñcates to the corresponding RCR certiñcates, on a pro rata basis, following any exchange. Weighted Average Lives (years)* PSA Prepayment Assumption Group 1 Classes 0% 100% 145% 180% 201% 340% 350% 500% ACÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ AEÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ AF and AI ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ AZ ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ FA, NO, SY and SA ÏÏÏÏÏÏÏ HF, HS and ABÏÏÏÏÏÏÏÏÏÏÏ Z ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ZA ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ PSA Prepayment Assumption Group 2 Classes 0% 100% 125% 160% 225% 300% 400% CDÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ CE, CJ, CL and OC ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ CGÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ PSA Prepayment Assumption Group 3 Classes 0% 100% 195% 350% 500% BA and IB ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ BO ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ZC ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ZD ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ZK ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ZB ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ PSA Prepayment Assumption Group 4 Classes 0% 100% 120% 155% 250% 500% AS, GS and SD ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ AT ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ AU ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ FB ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ IC, OG and KG ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ KDÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ KEÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ KI, LB and KC ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ KZ ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ SG and T ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ VA ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ VB ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ BC ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-11

14 PSA Prepayment Assumption Group 5 Classes 0% 300% 600% 900% 1200% WA ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ XA ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ PSA Prepayment Assumption Group 6 Classes 0% 300% 600% 900% 1200% WB ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ XB ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ PSA Prepayment Assumption Groups 5 and 6 Classes 0% 300% 600% 900% 1200% A ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ B ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ * Determined as speciñed under ""Description of the CertiÑcatesÌWeighted Average Lives of the CertiÑcates'' in this prospectus supplement. The A Class is formed from a combination of the WA Class in Group 5 and the WB Class in Group 6. The B Class is formed from a combination of the XA Class in Group 5 and the XB Class in Group 6. S-12

15 ADDITIONAL RISK FACTORS The rate of principal payments on the cer- In addition, as described in the related untiñcates will be aåected by the rate of principal derlying disclosure documents, the payments on the underlying mortgage loans. Class BA REMIC CertiÑcate is a sup- The rate at which you receive principal pay- port class, and the Class YX RCR Cerments on the certiñcates will be sensitive to the tiñcate is backed by REMIC certiñcates that are rate of principal payments on the mortgage support classes. A support class is entitled to loans underlying the related MBS, including receive principal payments on any distribution prepayments. Because borrowers generally may date only if scheduled payments of principal prepay their mortgage loans at any time without have been made on certain other classes in the penalty, the rate of principal payments on the related underlying REMIC trust. Accordingly, a mortgage loans is likely to vary over time. It is support class may receive no principal payments highly unlikely that the mortgage loans will for extended periods or may receive principal prepay payments that vary widely from period to at any of the prepayment rates we asperiod. sumed in this prospectus supplement, or You may obtain additional information about the underlying REMIC and RCR certiñ- at any constant prepayment rate until cates by reviewing their current class factors in maturity. light of other information available in the related disclosure documents. You may obtain Payments on the Group 2 and Group 3 Classes also will be aåected by the payment those documents from us as described on priorities governing the related underlying page S-3. REMIC or RCR certiñcates. If you invest in any Yields may be lower than expected due to Group 2 or Group 3 Classes, the rate at which unexpected rate of principal payments. The acyou receive payments also will be aåected by the tual yield on your certiñcates probably will be applicable priority sequence governing principal lower than you expect: payments on the related underlying REMIC or RCR certiñcates. if you buy your certiñcates at a premium and principal payments are faster than In particular, as described in the related you expect, or underlying disclosure documents, principal payments on the Class JL REMIC CertiÑand principal payments are slower than if you buy your certiñcates at a discount cate and the Class AK RCR CertiÑcate are governed by principal balance schedules. As you expect. a result, those underlying certiñcates may re- Furthermore, in the case of interest only ceive principal payments at rates faster or certiñcates and certiñcates purchased at a preslower than would otherwise have been the case. mium, you could lose money on your investment In some cases, those underlying certiñcates may if prepayments occur at a rapid rate. receive no principal payments for extended periods. Prepayments on the related mortgage loans Recent hurricanes in the Gulf Coast region may have occurred at rates faster or slower than may present risk of increased mortgage loan the rates initially assumed. This prospectus sup- prepayments. In August and September 2005, plement contains no information as to whether Hurricane Katrina and Hurricane Rita and re- lated events caused catastrophic damage to ex- those underlying certiñcates have ad- tensive areas along the Gulf Coast of the United hered to their principal balance States, including portions of costal and inland schedules, Alabama, Florida, Louisiana, Mississippi, and any related support classes remain outresulting from severe Öooding, high winds and Texas. The full extent of the physical damage standing, or environmental contamination remains uncer- those underlying certiñcates otherwise tain at this time. Hundreds of thousands of have performed as originally anticipated. people have been displaced and interruptions in S-13

16 Unpredictable timing of last payment af- fects yields on certiñcates. The actual Ñnal pay- ment of your class is likely to occur earlier, and could occur much earlier, than the Ñnal distribu- tion date listed on the cover page of this pro- spectus supplement. If you assume that the actual Ñnal payment will occur on the Ñnal distribution date speciñed, your yield could be lower than you expect. the regional economy have been signiñcant. Although the long-term eåects are unclear, these events could lead to a general economic downturn in the Gulf Coast region, including job losses and declines in real estate values. Accordingly, defaults on any mortgage loans in the aåected areas may increase, in turn resulting in early payments of principal of the certiñcates backed by those mortgage loans. Additionally, casualty losses on mortgage properties with hurricane or Öood damage may result in early payment of principal of the related certiñcates. Some investors may be unable to buy certain classes. Investors whose investment activi- ties are subject to legal investment laws and You must make your own decisions regulations, or to review by regulatory authoriabout the various applicable assumptions, ties, may be unable to buy certain certiñcates. including prepayment assumptions, when You should obtain legal advice to determine deciding whether to purchase the whether you may purchase the certiñcates. certiñcates. Uncertain market for the certiñcates could make them diçcult to sell and cause their values to Öuctuate. We cannot be sure that a market for resale of the certiñcates will develop. Further, if a market develops, it may not continue or be suçciently liquid to allow you to sell your certif- icates. Even if you are able to sell your certiñ- cates, the sale price may not be comparable to similar investments that have a developed mar- ket. Moreover, you may not be able to sell small or large amounts of certiñcates at prices compa- rable to those available to other investors. You should purchase certiñcates only if you under- stand and can tolerate the risk that the value of your certiñcates will vary over time and that your certiñcates may not be easily sold. Weighted average lives and yields on the certiñcates are aåected by actual characteristics of the underlying mortgage loans. We have assumed that the mortgage loans underlying the Trust MBS have certain characteristics. However, the actual mortgage loans probably will have diåerent characteristics from those we assumed. As a result, your yields could be lower than you expect, even if the mortgage loans prepay at the indicated constant prepayment rates. In addition, slight diåerences between the assumed mortgage loan characteristics and the actual mortgage loans could aåect the weighted average lives of the classes of certiñcates. Terrorist activities and related military and political actions by the U.S. government could cause reductions in investor conñdence and sub- stantial market volatility in real estate and secu- rities markets. It is impossible to predict the extent to which terrorist activities may occur or, if they do occur, the extent of the eåect on the certiñcates. Moreover, it is uncertain what effects any past or future terrorist activities or any related military or political actions on the part of the United States government and others will have on the United States and world Ñnancial markets, local, regional and national economies, real estate markets across the United States, or particular business sectors, including those af- fecting the performance of mortgage loan bor- rowers. Among other things, reduced investor conñdence could result in substantial volatility in securities markets and a decline in real estate- Level of Öoating rate index aåects yields on certain certiñcates. The yield on any Öoating rate or inverse Öoating rate certiñcate will be aåected by the level of its interest rate index. If the level of the index diåers from the level you expect, then your actual yield may be lower than you expect. Delay classes have lower yields and market values. Since certain classes do not receive inter- est immediately following each interest accrual period, these classes have lower yields and lower market values than they would if there were no such delay. Reinvestment of certiñcate payments may not achieve same yields as certiñcates. The rate of principal payments of the certiñcates is uncertain. You may be unable to reinvest the payments on the certiñcates at the same yields provided by the certiñcates. S-14