(a) As described in Part 1643, Financing, the premiums, if any, on housing bonds sold by the State are paid into the State Housing Debt Fund and do not ordinarily pass through the project's bank accounts. Premiums on State housing bonds, if any, are credited to development costs, whether the bonds are sold prior or subsequent to the date of substantial completion. The premium is recorded, by a journal entry, whenever the local agency is notified by the Division of Housing as to the amount of the premium allocable to the projects participating in the bond issue, as follows:

To record the premium on housing bond issue no. ____, as per letter from Division of Housing dated ____,19__.

(b) The premium on State housing bonds will not be amortized over the life of the bonds, as is sometimes done, but is, ordinarily, applied by the State Comptroller to the first interest payments falling due. The division will notify the local agency, in advance of the date the local agency is called upon to remit the interest for deposit in the State Housing Debt Fund, as to how much of the premium, if any, the Comptroller intends to apply to the payment of the interest and the local agency will then remit the difference between the scheduled payment and the premium applied. The actual amount remitted will be paid in the manner previously described (see entry [1], § 1644-3.5, above) and account 1124, State Housing Debt Fund, is charged. On the date the interest is due to be paid to the bondholders, entry (2) above (§ 1644-3.5) is made, charging the full scheduled amount of the interest payment, before the deduction for the premium applied, to the accrued interest payable account and crediting account 1124, State Housing Debt Fund. Note that the amount of the quarterly accrual for the interest on the bonds, computed as per section 1644-3.3, is not affected by either the receipt or the application of the premium.