RISK SHARING.

SEC. 4108. RISK SHARING. (a) Guaranty Agency Reinsurance Percentage.— Section 428(c)(1) of the Act (20 U.S.C. 1078(c)(1)) is amended— (1) in the fourth sentence of subparagraph (A), by striking “100 percent” and inserting “98 percent”; (2) in subparagraph (B)(i), by striking “90 percent” and inserting “88 percent”; (3) in subparagraph (B)(ii), by striking “80 percent” and inserting “78 percent”; and (4) by adding at the end the following new subparagraphs: “(E) Notwithstanding any other provisions of this section, in the case of a loan made pursuant to a lender-of-last-resort program, the Secretary shall apply the provisions of— “(i) the fourth sentence of subparagraph (A) by substituting ‘100 percent’ for ‘98 percent’; “(ii) subparagraph (B)(i) by substituting ‘100 percent’ for ‘88 percent’; and “(iii) subparagraph (B)(ii) by substituting ‘100 percent’ for ‘78 percent’. “(F) Notwithstanding any other provisions of this section, in the case of an outstanding loan transferred to a guaranty agency from another guaranty agency pursuant to a plan approved by the Secretary in response to the insolvency of the latter such guarantee agency, the Secretary shall apply the provision of— “(i) the fourth sentence of subparagraph (A) by substituting ‘100 percent’ for ‘98 percent’; “(ii) subparagraph (B)(i) by substituting ‘90 percent’ for ‘88 percent’; and “(iii) subparagraph (B)(ii) by substituting ‘80 percent’ for ‘78 percent’.”. (b) Risk Sharing by the Loan Holders.— Section 428(b)(1)(G) of the Act (20 U.S.C. 1078(b)(1)(G)) is amended— (1) by striking “100 percent” and inserting “98 percent”; and (2) by adding before the semicolon at the end the following: “, except that such program shall insure 100 percent of the unpaid principal of loans made with funds advanced pursuant to section 428(j) or 439(g)”. (c) Effective Date.— The amendments made by this section shall apply to any loan for which the first disbursement is made on or after October 1, 1993.