NOVASTAR MORTGAGE FUNDING TRUST
NOVASTAR HOME EQUITY LOAN ASSET-BACKED CERTIFICATES
SERIES 2002-1
STATEMENT TO BONDHOLDER


DISTRIBUTIONS IN DOLLARS
				PRIOR												CURRENT
		ORIGINAL		PRINCIPAL								REALIZED		DEFERRED		PRINCIPAL
CLASS		FACE VALUE		BALANCE		INTEREST		PRINCIPAL		TOTAL		LOSSES		INTEREST		BALANCE

	A-1		316,900,000.00		307,526,209.19		535,608.15		4,503,561.18		5,039,169.33		0.00		0.00		303,022,648.01
	A-2		140,600,000.00		133,912,407.75		235,462.65		3,272,107.15		3,507,569.80		0.00		0.00		130,640,300.60
	M-1		12,500,000.00		12,500,000.00		27,395.83		0.00		27,395.83		0.00		0.00		12,500,000.00
	M-2		10,000,000.00		10,000,000.00		27,750.00		0.00		27,750.00		0.00		0.00		10,000,000.00
	M-3		7,500,000.00		7,500,000.00		23,812.50		0.00		23,812.50		0.00		0.00		7,500,000.00
	B		3,750,000.00		3,750,000.00		20,500.00		0.00		20,500.00		0.00		0.00		3,750,000.00
	AIO		395,124,349.85		483,938,716.94		1,616,299.95		0.00		1,616,299.95		0.00		0.00		483,938,716.94
	O		8,750,000.00		8,750,000.00		0.00		0.00		0.00		0.00		0.00		8,750,000.00
	P		100.00		100.00		130,791.87		0.00		130,791.87		0.00		0.00		100.00

TOTALS			500,000,100.00		483,938,716.94		2,617,620.95		7,775,668.33		10,393,289.28		0.00		0.00		476,163,048.61


FACTOR INFORMATION PER $1000 OF ORIGINAL FACE												PASS-THROUGH
		PRIOR								CURRENT		RATES
		PRINCIPAL								PRINCIPAL
CLASS	CUSIP	BALANCE		INTEREST		PRINCIPAL		TOTAL		BALANCE		CURRENT			NEXT

A-1	66987XBC8		970.420351		1.690149		14.211301		15.901449		956.209050		2.090000	%		2.093750	%
A-2	66987XBD6		952.435333		1.674699		23.272455		24.947154		929.162878		2.110000	%		2.113750	%
M-1	66987XBE4		1,000.000000		2.191666		0.000000		2.191666		1,000.000000		2.630000	%		2.633750	%
M-2	66987XBF1		1,000.000000		2.775000		0.000000		2.775000		1,000.000000		3.330000	%		3.333750	%
M-3	66987XBG9		1,000.000000		3.175000		0.000000		3.175000		1,000.000000		3.810000	%		3.813750	%
B	66987XBK0		1,000.000000		5.466667		0.000000		5.466667		1,000.000000		6.560000	%		6.563750	%
AIO	66987XBH7		1,224.775737		4.090611		0.000000		4.090611		1,224.775737		4.007863	%		—
P	66987XBJ3		1,000.000000		1,307,918.700000		0.000000		1,307,918.700000		1,000.000000		—			—


Seller:		NovaStar Financial, Inc.
Servicer:		NovaStar Mortgage Corporation
Record Date:		September 30, 2002
Distribution Date:		September 25, 2002

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NOVASTAR MORTGAGE FUNDING TRUST
NOVASTAR HOME EQUITY LOAN ASSET-BACKED CERTIFICATES
SERIES 2002-1
STATEMENT TO BONDHOLDER
0

Distribution Date: September 25, 2002

Aggregate Collections From the Mortgage Loans


Available Funds			10,807,149.25
Total Servicer Advances			0.00
Total Compensating Interest			0.00


Aggregate Beginning Principal Balance of Mortgage Loans		483,938,716.94
Aggregate Ending Principal Balance of Mortgage Loans		476,163,048.61
Credit Enhancement Percentage		8.92551	%
Cumulative Realized Losses		0.00
Current Realized Losses		0.00
Difference between Swap Notional Amount and Certificates		167,412,948.61
Loan Count		3,407
Pre-Funding Account		0.00
Prepayment Interest Shortfalls		0.00
Principal Prepayments		7,435,948.03
Subsequent Mortgage Loans added (Number/Balance)	0	0.00
Swap Notional Amount		300,000,000.00
Weighted Average Mortgage Rate		8.76989	%
Available Funds Cap Carryforward Amount A-1		0.00
Available Funds Cap Carryforward Amount A-2		0.00
Available Funds Cap Carryforward Amount M-1		0.00
Available Funds Cap Carryforward Amount M-2		0.00
Available Funds Cap Carryforward Amount M-3		0.00
Available Funds Cap Carryforward Amount B		0.00
Supplemental Interest Payment to Class A-1		0.00
Supplemental Interest Payment to Class A-2		0.00
Supplemental Interest Payment to Class M-1		0.00
Supplemental Interest Payment to Class M-2		0.00
Supplemental Interest Payment to Class M-3		0.00
Supplemental Interest Payment to Class B		1,242.28
Unpaid Interest Shortfall Amount to Class A-1		0.00
Unpaid Interest Shortfall Amount to Class A-2		0.00
Unpaid Interest Shortfall Amount to Class M-1		0.00
Unpaid Interest Shortfall Amount to Class M-2		0.00
Unpaid Interest Shortfall Amount to Class M-3		0.00
Unpaid Interest Shortfall Amount to Class B		0.00
Unpaid Interest Shortfall Amount to Class AIO		0.00
Swap Payment to SW005CSFB		130,555.56
Swap Payment to SW006CSFB		37,631.94
Swap Payment to SW007MS		191,951.39
Swap Payment to SW008MS		50,811.39


DELINQUENCY									REO
INFORMATION	30-59 DAYS		60-89 DAYS		90 + DAYS		FORECLOSURE		PROPERTY

DELINQUENT BALANCE		606,410.99		1,200,791.72		229,167.68		2,191,093.95		523,538.05
NUMBER OF LOANS		7		9		1		13		3

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NOVASTAR MORTGAGE FUNDING TRUST SERIES 2002-1 8-K