The GSEs Are Being (Very Slowly) Phased Out; Perhaps We Are Seeing The Consequences

Nick Timiraos wrote a piece in the Wall Street Journal on Thursday about how mortgage rates on loans eligible for Fannie Mae and Freddie Mac purchase are higher than those that are not--loans with balances that exceed the "conforming loan limit" that specifies the maximum size of a loan eligible for GSE purchase. Why did this happen?  How is it that loans backed by a government guarantee cost more than loans without such a guarantee?