Fannie Mae (FNM) sold its $4 billion three-year note at 74 basis points over comparable Treasurys, according to a person familiar with the deal.

Demand for the bond was high at more than $9 billion, the person said.

This issue follows Freddie Mac's (FRE) sale of two benchmark notes last week, with maturities of two and 10 years.

The sizes of these offerings were kept below mega-size levels of about $3 billion on the 10-year, and $5 billion on the two-year. This offered the market a respite from the huge deals that had dominated the first few issues of this year.

Fannie's previous benchmark note sold in March was a $9 billion, five-year note.

Fannie's previous three-year issue was in January of this year, when it sold $6 billion of these securities at 83 basis points over comparable Treasury yields.

Barclays Capital, Deutsche Bank and J.P. Morgan are the lead managers on the deal, which will settle Friday and has a yield of 1.918%.

   -By Anusha Shrivastava, Dow Jones Newswires; 201-938-2371; anusha.shrivastava@dowjones.com