(a) With the approval of the supervising agency, any person owning a project may convey such project to a mutual redevelopment company and a mutual redevelopment company may be organized to acquire an existing project prior to expiration of an initial tax exemption granted pursuant to section one hundred twenty-five, and may own, maintain, operate, sell, and convey such project pursuant to this article. In part payment of the purchase price therefor, such company may execute and deliver a bond and mortgage or an issue of bonds under a trust indenture, the aggregate principal amount of which does not exceed ninety per centum of such purchase price, and which shall be secured by a first mortgage upon all the real property of which such project consists. Such bonds are hereby declared securities in which all public officers and bodies of the state and of its municipal subdivisions, all insurance companies and associations, all savings banks and savings institutions, including savings and loan associations, executors, administrators, guardians, trustees, and all other fiduciaries in the state may properly and legally invest the funds within their control. The total capital created and bonds or debentures issued by such mutual redevelopment company shall not exceed the total cost of the purchase of the project and an allowance for working capital not greater in amount than three per centum of such cost.

(b) With the consent of the local legislative body, any initial tax exemption granted pursuant to section one hundred twenty-five, shall continue after conveyance of a project to a mutual redevelopment company for the period of years originally provided for in the contract, or for the unexpired portion thereof if such period shall have commenced, subject to prior termination pursuant to section one hundred twenty-four or section one hundred twenty-five, and this article shall continue to be applicable to such project as though such project had been initially undertaken by such mutual redevelopment company; provided, however, that nothing herein shall require the resubmission of the plan of the project and the contract relating thereto for approval pursuant to section one hundred fourteen. The contract may, with the approval of the local legislative body and of the holder of the mortgage on the project, be modified in a manner consistent with this section.