Prior to the issuance of State housing bonds, debt service is limited to the provision for the payment of interest on the indebtedness. The local agency's indebtedness outstanding during this period will be temporary (short-term) indebtedness, having maturities not in excess of one year, whether the funds have been borrowed from the State or from private investors. The principal amounts of maturing temporary indebtedness will be periodically refunded out of the proceeds of the issue of new short-term obligations by the State or by the local agency, depending on the circumstances, and, ultimately, out of the proceeds of an issue of housing bonds by the State, as described in Part 1643, Financing.