Sept. 10 (Bloomberg) -- Fannie Mae, the mortgage-finance company seized by the U.S. government, will be permitted to pay its third-quarter preferred stock dividends.

The dividends were declared prior to Fannie being placed in conservatorship, ``and are therefore an outstanding obligation to be honored,'' the Washington-based company said in a statement.

The Treasury Department and Federal Housing Finance Agency on Sept. 7 put Fannie and Freddie Mac back under federal control for the first time in about 40 years after $14.9 billion in net losses threatened to further disrupt the housing market. All dividends were eliminated and the Treasury said it would invest as much as $200 billion in new preferred stock as needed to keep the companies solvent.

The common and preferred stocks lost the majority of their market value the day after the government's announcement, with Fannie falling 90 percent to 73 cents in New York Stock Exchange composite trading, and Freddie dropping 83 percent to 88 cents.

Fannie's $7 billion of 8.25 percent perpetual preferred shares have tumbled 79 percent this week to $2.91. Freddie's $1.1 billion of 5.57 percent preferred stock sank 83 percent to $1.55.

To contact the reporter on this story: Romaine Bostick in Washington at rbostick@bloomberg.net.

Last Updated: September 10, 2008 18:10 EDT