Reverse mortgage in Kentucky

Homeowners 62 and older in Kentucky can borrow against home value through a reverse mortgage Kentucky loan. Every lender is overseen by the state's Department of Financial Institutions. The standard federal government-backed loan is a Home Equity Conversion Mortgage, or HECM, and most borrowers use it. While you live in the house, no monthly mortgage payment is due. Your balance grows at a median note rate of 5.75% in Kentucky, and you're free to review how a reverse mortgage works before you apply.

In the period from October 2025 to August 2026, 146 Kentucky owners got a HECM, compared with 177 loans during the 2025 fiscal year. Of that group, home purchases accounted for 8 and refinances made up 13. With the middle Kentucky home at $279,000, the median initial principal limit came out to $124,872. Before fees and loan payoffs are taken out, your principal limit is the whole sum available to borrow. Since Kentucky has 0 federal counseling agencies inside the state, you'll do your counseling over the phone.

Kentucky's $49,100 homestead exemption for older homeowners

Property taxes and homeowners insurance are your responsibility, per federal Consumer Financial Protection Bureau rules. You're also required to live in the property as your primary home and keep it in good shape. Every state follows these federal reverse mortgage requirements. A loan defaults if you get behind on property taxes, so the lender can then require repayment and begin foreclosing. Tax relief from the state helps keep what you owe affordable.

Your tax bill drops with the Kentucky Department of Revenue homestead exemption when you're 65 or older, or classified as totally disabled. In assessment year 2025 and again in 2026, Kentucky subtracts $49,100 from the assessed value of your home before property tax is calculated. The assessed value is the dollar amount your county assigns to your home for tax purposes. To keep up with inflation, the homestead exemption amount is updated by law every 2 years, having climbed from $46,350 in 2023 and 2024.

By December 31, file with your county Property Valuation Administrator

Turning 65 doesn't automatically give you this tax break. To qualify, on the January 1 assessment date you must be the owner, live there and keep the property as your personal residence. File your application through your county Property Valuation Administrator. You can show your age with a driver's license, birth certificate, passport or any other accepted document. File your application with the local office no later than December 31 in the eligible tax year.

Are lenders licensed by the Kentucky Department of Financial Institutions?

Yes, Kentucky oversees the 37 reverse mortgage lenders actively operating there, plus their loan officers. The Department of Financial Institutions, following KRS Chapter 286.8, licenses mortgage bankers, servicers and brokers for making, buying, selling, servicing or brokering Kentucky residential mortgages. Stay safe from unlicensed operators by verifying a lender's license before you share your financial records.

To complain about a Kentucky lender, where do you file?

If a mortgage company or loan officer doesn’t treat you fairly, you can submit a consumer complaint to the Kentucky Department of Financial Institutions. The department investigates complaints to check whether a lender or servicer broke state rules. When an investigation finds a company violated Kentucky law, the department can seek administrative remedies or hand the case to criminal authorities.