Mortgage Note Investing in Kentucky

Kentucky is a judicial-foreclosure state. An uncontested file can reach the master commissioner's sale in five to six months, but service, answers and the court calendar push the realistic timeline to 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 the eight-plus-month calendar, not to the best case.

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. Property taxes are billed once a year and due by December 31, with a 2% discount through November 1 (Ky. Rev. Stat. §134.015). An unpaid bill becomes a certificate of delinquency that bears 12% simple interest (§134.125), sits senior to your mortgage, and can be sued on after a one-year tolling period (§134.546) — track tax status on every file. No license is required to buy Kentucky paper.