Mortgage Note Investing in Kentucky

Kentucky is a judicial-foreclosure state, and the realistic timeline runs around eight and a half months from filing to a completed sale. That is a patience play: a lender files in circuit court, the property is appraised, and the master commissioner conducts the sale. Underwrite to that eight-plus-month calendar, not to a best-case scenario.

Two costs make Kentucky more expensive than the timeline alone suggests. First, foreclosure here is pricey — budget roughly $6,760 in foreclosure cost per file, well above the cheap-and-fast states, and bake that into the bid. Second is the redemption wrinkle. Kentucky grants a six-month post-sale redemption, but only when the property sells at the foreclosure auction for less than two-thirds of its appraised value (Ky. Rev. Stat. §426.530). Bid at or above the two-thirds mark and there is no redemption at all. So redemption is not a general borrower right here — it is a conditional consequence of a low sale price, and one you can often avoid by bidding up to the appraisal.

Deficiency judgments are available, leaving personal recovery as possible upside beyond the collateral. Kentucky's tax system is a tax lien with a one-year redemption and 12% interest, sitting senior to your mortgage — track tax status on every file. No license is required to buy Kentucky paper.