Fannie & Freddie will never be true- private companies, before they were placed into receivership, technically they were private corporations, but in reality they have always acted as a "arm" of the Treasury and Federal reserve, they have a open ended line of credit with the goverment, and are too big to fail. The money center banks have always used them as a "sinking fund" to unload their loans on. The politicians have used the GSE'S to further there pet-housing policy's. Finally NOBODY wants to hold 3.5% 30 year paper, there is no money in it and the risk is to high. as far as low down payment loans, they will always be around because real estate prices would collapse, today nobody is really buying real estate with 3%-5% down its more like a lease with an -option to buy, and unless it goes up in value, the poor borrower is simply treading water