9 NYCRR 1644-3.7

Interest received by the State Comptroller on State Housing Fund investments (see Part 1645, Investments) will ordinarily be paid into the State Housing Debt Fund and applied to the payment of interest on housing bonds outstanding in the same manner as premiums received on the sale of bonds. The recording of interest on State Housing Debt Fund investments is on a cash basis, that is, the interest earned is not periodically accrued, as is the case with interest on other investments, but the entry is made whenever the local agency is notified by the division as to the amount of the interest received by the Comptroller. Upon receipt of such notice, a journal entry is made charging account 1124, State Housing Debt Fund, with the amount of the interest received by the Comptroller, and crediting the applicable development cost or operating income account, as described in Part 1645, Investments. As with the premium on State housing bonds, the division will then notify the local agency, in advance of the date the local agency is called upon to remit the interest on the bond issue for deposit in the State Housing Debt Fund, as to how much of the interest on State Housing Fund investments, if any, the Comptroller intends to apply to the payment of the interest on the bonds and the local agency will then remit the difference between the scheduled interest and the interest on State Housing Fund investments 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 interest on State Housing Fund investments 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 interest on State Housing Fund investments.