SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) June 30, 2006

NOVASTAR MORTGAGE FUNDING TRUST, SERIES 2006-1

(Issuing Entity with respect to Notes)

NOVASTAR CERTIFICATES FINANCING CORPORATION

(Exact name of depositor and co-registrant as specified in its charter)

Delaware

333-131111-02

48-1194616

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(I.R.S. Employer

Identification No.)

NOVASTAR MORTGAGE FUNDING CORPORATION

(Exact name of sponsor and registrant as specified in its charter)

Delaware

333-131111

48-1195807

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(I.R.S. Employer

Identification No.)

8140 Ward Parkway, Suite 300

Kansas City, Missouri

64114

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code (816) 237-7000

No Change

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

NovaStar Mortgage Funding Corporation and NovaStar Certificates Financing Corporation registered issuances of up to $4,145,350,000 principal amount of Asset-Backed Notes on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Act”), by the Registration Statement on Form S-3 (Registration File Nos. 333-131111 and 333-131111-02) (the “Registration Statement”). Pursuant to the Registration Statement, NovaStar Mortgage Funding Trust, Series 2006-1, issued on April 28, 2006, $1,320,974,000 in aggregate principal amount of its Home Equity Loan Asset-Backed Notes, Series 2006-1, Class A-1A, Class A-2A, Class A-2B, Class A-2C, Class A-2D, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 Notes (the “Offered Notes”). Also issued, but not offered by NovaStar Mortgage Funding Trust, Series 2006-1 were its Home Equity Loan Asset-Backed Notes, Series 2006-1, Class M-9, Class M-10 and Class M-11 Notes (and collectively with the Offered Notes, the “Notes”).

The Sale and Servicing Agreement filed in connection with the Notes is hereby amended pursuant to Amendment Number 1 to the Sale and Servicing Agreement, dated as of June 30, 2006 attached hereto as Exhibit 10.1, among NovaStar Mortgage Funding Trust, Series 2006-1, as issuing entity (the “Issuing Entity”), NovaStar Certificates Financing Corporation, as depositor, NovaStar Mortgage, Inc., as servicer and as seller, U.S. Bank, National Association, as custodian (the “Custodian”), JPMorgan Chase Bank, National Association, as indenture trustee (the “Indenture Trustee”), and J.P. Morgan Trust Company, National Association, as co-trustee (the “Co-Trustee”).

Item 9.01 - Financial Statements and Exhibits:

(a)

Financial Statements of Business Acquired: None

(b)

Pro Forma Financial Information: None

(c)

Exhibits:

10.1

Amendment No. 1 to the Sale and Servicing Agreement, dated as of June 30, 2006, among the Issuing Entity, the Depositor, the Sponsor, the Servicer, the Custodian, the Indenture Trustee and the Co-Trustee.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: July 5, 2006


NOVASTAR CERTIFICATES FINANCING CORPORATION

By:		/s/ Jeffrey D. Ayers
Name:		Jeffrey D. Ayers
Title:		Senior Vice President, General Counsel and Secretary

Exhibit Index


Exhibit No.		Description

Exhibit 10.1		Amendment No. 1 to the Sale and Servicing Agreement, dated as of June 30, 2006, among the Issuing Entity, the Depositor, the Sponsor, the Servicer, the Custodian, the Indenture Trustee and the Co-Trustee.

NovaStar Mortgage Funding Trust, Series 2006-1 8-K