Fannie Mae preparing for long winter and 2008: CEO

NEW YORK (Reuters) - Fannie Mae, the biggest provider of U.S. home loan funding, will have enough capital to weather a negative housing market through 2008, Chief Executive Officer Daniel Mudd said on Tuesday.

A cut in the dividend and sale of $7 billion in preferred stock earlier this month will give Fannie Mae (FNM.N) "incremental extra capital" to manage its business of guaranteeing mortgage securities and make opportunistic purchases for its portfolio, he said in a CNBC interview.

"That's our expectation," he said when asked if the capital-raising efforts would be enough.

Fannie Mae is "being conservative, keeping dry powder (in capital), preparing for a pretty long winter, a long 2008 and then some recovery" in 2009, said Mudd, who was interviewed in New York.

The Washington-based, government-sponsored enterprise has also raised fees for guaranteeing mortgages to compensate for the increased uncertainty in the housing market, where defaults are rising across all types of loans, Mudd added.

(Reporting by Al Yoon; Editing by Jonathan Oatis)