Section 16A. If an action is brought or if proceedings are undertaken for the foreclosure of a mortgage or lien upon a project or upon any severable portion thereof, or for the termination of the corporation's leasehold or other interest in the same, or if in order to avert such action or such proceedings the corporation shall make a conveyance or otherwise release or quitclaim its interests in the same, the successor in interest thereto, including the federal government or any instrumentality thereof, shall, upon its acquisition of the project or severable portion thereof, have the option of (1) holding the same subject to all the provisions of this chapter and having all of the powers, rights, privileges, benefits and exemptions set forth in this chapter; or (2) conveying or otherwise releasing its interest to a purchaser who agrees as part of the terms of conveyance or release to hold the same subject to all of the provisions of this chapter and who shall thereby have all of the powers, rights, privileges, benefits and exemptions set forth in this chapter; or (3) in the case of organization subject to the supervision of either the commissioner of banks or of the commissioner of insurance, with the prior written approval of the commissioner exercising supervision, and in the case of a corporation organized under this chapter or any other successor in interest, with the prior written approval of the housing board, (a) Holding the project or severable portion thereof so acquired free from all restrictions and limitations imposed by this chapter and without any of the powers, rights, privileges, benefits and exemptions thereby conferred, or (b) Conveying or otherwise releasing its interest in the project or a severable portion thereof to a purchaser to be held by such purchaser free of all restrictions and limitations imposed by this chapter, and without any of the powers, rights, privileges, benefits and exemptions thereby conferred; provided, however, that whenever any successor in interest or purchaser therefrom holds the project or severable portion thereof subject to all the provisions of this chapter and having all the rights, powers, privileges, benefits and exemptions set forth in the chapter, the periods of fifteen years or such further time as may be provided under section ten and as set forth in sections ten and sixteen of this chapter shall be computed from the date of organization of the corporation which initiated the project, regardless of any default upon the part of such corporation.

Whenever any such successor in interest or purchaser therefrom shall exercise any option under this section it shall file with the housing board or with the commissioner exercising supervision, as the case may be, such certificate as may be required by the housing board or the commissioner. Any such option may be exercised at any time within one year from the date of acquisition of interest and until such certificate shall have been filed the project or portion thereof shall be held subject to all of the provisions of this chapter and the successor in interest shall have all of the powers, rights, privileges, benefits and exemptions thereby conferred.