The quarterly loss is the fifth consecutive for the Washington-based mortgage finance company that has been operating under a government conservatorship since September.
Fannie Mae in October warned it would write down "substantially all" of its deferred tax assets, which had become a controversial addition to capital as losses mounted.
Deferred tax assets can be used to offset future taxes, but only if the company can show it will return to profitability.
Credit expenses soared to $9.2 billion in the quarter due to deteriorating mortgage credit conditions and as home prices declined, the company said in a statement.
The company said it expects a significant loss for the fourth quarter if downward trends in U.S. housing and financial markets continue.
Further losses for the company this quarter mean the government may have to inject billions of dollars of capital to help the company maintain routine operations.
The government pledged to keep a positive level of shareholders equity.