(f) Interest on capital indebtedness is an allowable cost if the debt generating the interest is approved by the commissioner, incurred for authorized purposes, and the principal of the debt does not exceed that which is either approved by the commissioner or the cost of the authorized purposes. Capital indebtedness shall mean all debt obligations of a residential treatment facility that are:

1. (1) evidenced by a mortgage note or bond and secured by a mortgage on the land, building or nonmovable equipment, a note payable secured by the nonmovable equipment of a facility, a capital lease;
2. (2) incurred for the purpose of financing the acquisition, construction or renovation of land, building or nonmovable equipment;
3. (3) found by the commissioner to be reasonable, necessary and in the public interest with respect to the residential treatment facility. Interest related to refinancing indebtedness shall be considered an allowable cost only to the extent that it is payable with respect to an amount equal to the unpaid principal of the indebtedness then being refinanced. However, interest incurred on refinanced debt in excess of the previously unpaid balance of the refinanced indebtedness will be allowable on acceptable demonstration to the commissioner that such refinancing will result in a debt service savings over the life of the indebtedness; or
4. (4) incurred for the purpose of advance refunding of debt. Losses resulting from the advanced refunding of debt shall be treated and reported as deferred charge. This deferred charge is to be amortized on a straight-line basis over the period to the scheduled maturity date of the refunding debt.