Yes, the RMH has been closed for some time now, but the Kentucky Mountain still registers grade mares under their appendix category. The fee rises the longer you wait to register so I would call the office and find out which registry she would be eligible under since her sire is Spotted Mountain horse. Many KMH and Rocky horses trot in the pasture and gait when under saddle so you have a 50/50 chance she will gait.
A few years back I registered a grade chocolate mare in the appendix through KMH. Could NOT get her to gait a lick so the registration never went any further since she couldn't be certified, but she was still registered Kentucky Mountain Saddle Horse. Just depends if you want to spend the money.
As to the KY Incentive fund, I thought that both horses had to be registered and Incentive Fund registered to be eligible.