Fairholme Funds, Inc. - The Fairholme Focused Income Fund Will Re-Open to New Investors

The Board of Directors of Fairholme Funds, Inc. has approved the re-opening of The Fairholme Focused Income Fund (NASDAQ:FOCIX) to new investors. Effective March 27, 2015, The Fairholme Focused Income Fund (the “Income Fund”) will offer its shares to new investors and begin accepting orders for the purchase of the Income Fund’s shares from new investors.

The Income Fund retains the right to suspend the sale of its shares to investors in the future.

The Fairholme Funds, Inc. Prospectus, which has been filed with the Securities and Exchange Commission, provides additional information about the terms of the Income Fund’s offering.

The Income Fund’s investment objectives, risks, charges, and expenses should be considered carefully before investing. The prospectuscontains this and other important information about the Income Fund, and it may be obtained by calling Shareholder Services at 1-866-202-2263 or visiting our website www.fairholmefunds.com. Read it carefully before investing.

Investing in the Income Fund involves risk including loss of principal. The Income Fund is a non-diversified mutual fund, which means that the Income Fund invests in a smaller number of securities when compared to more diversified funds. This strategy exposes the Income Fund and its shareholders to greater risk of loss from adverse developments affecting portfolio companies. The Income Fund’s investments are also subject to interest rate risk, which is the risk that the value of a security will decline because of a change in general interest rates. Investments subject to interest rate risk will usually decrease in value when interest rates rise and rise in value when interest rates decline. Also, securities with long maturities typically experience a more pronounced change in value when interest rates change. Debt securities are subject to credit risk (potential default by the issuer). The Income Fund may invest without limit in lower-rated securities. Compared to higher-rated fixed income securities, lower-rated debt may entail greater risk of default and market volatility.