Federal National Mortgage Association (Fannie Mae), which makes a market in residential mortgages, reported a first-quarter loss of $17.4 million (26 cents per share), compared with a gain of $14.5 million (22 cents) during the first quarter of 1984.

The government-chartered corporation lost money because it paid higher interest rates on funds borrowed than it earned on the mortgages it holds. The $17.4 million loss was down from a $31.2 million loss in the fourth quarter of 1984 because interest rates declined, said Chairman David O. Maxwell.

VSE Corp., an Alexandria company engaged in engineering, development and testing services, reported a net loss for 1984 of $453,000 (24 cents per share) as a result of a change in accounting methods. Earnings from continuing operations in 1984 amounted to $2.1 million ($1.11 per share), up from $1.16 million (67 cents) in 1983. Revenues increased to $73.7 million from $55.4 million in the same period.

The accounting change affected the value of VSE's subsidiary, Metropolitan Capital Corp. and its investment in Digital Switch Corp. stock. A large increase in the Digital Switch stock price inflated VSE's profits without producing any cash income. Under the new accounting system, MetCap's investment in Digital Switch will be carried at the lower of cost or fair value method so any gain in the stock will not show in VSE's profits, but any decline will.