Fannie Mae ( FNM) projected after-tax losses of $250 million to $550 million from the hurricanes that battered the Gulf Coast last month.

The Washington-based mortgage giant said the Rita-Katrina losses stem "primarily from our guaranty of principal and interest payments" due to holders of Fannie Mae mortgage-backed securities secured by property in Mississippi and Louisiana, as well as portfolio holdings of mortgages and mortgage-related securities secured by property in the affected areas, and real estate the company owns there.

Fannie also said it believes it has exceeded the 30% capital surplus requirement imposed in last year's agreement with the Office of Federal Housing Enterprise Oversight. OFHEO forced Fannie to build up its reserves after a probe of its books suggested the lender was undercapitalized. Fannie is due to formally submit a capital standing report by Oct. 30 and said it will continue to work with OFHEO on that document.

Fannie is in the midst of restating its books for recent years to change how it accounts for derivatives contracts used to hedge portfolio risk.

On Friday, Fannie rose 28 cents to $42.24.