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: April 29, 1998
(Date of earliest event reported)
NOVASTAR MORTGAGE FUNDING CORPORATION (as depositor under the
Trust Agreement, dated as of April 1, 1998, and pursuant to which
an Indenture was entered into, providing for, inter alia, the
issuance of NovaStar Mortgage Funding Trust, Series 1998-1 Home-
Equity Loan Asset-Backed Bonds)
NovaStar Mortgage Funding Corporation
(Exact name of registrant as specified in its charter)
Delaware 333-44099 48-1195807
(State or Other (Commission (I.R.S. Employer
Jurisdiction of Incorporation) File Number) Identification No.)
1901 West 47th Street
Suite 105
Kansas City, Kansas 66205
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code:(913) 514-3500
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Item 5. Other Events.
On or about April 30, 1998, the Registrant will cause the
issuance and sale of approximately $300,000,000 aggregate
principal amount of Home Equity Loan Asset-Backed Bonds, Series
1998-1 (the "Bonds"), pursuant to an Indenture to be dated as of
April 1, 1998, between NovaStar Mortgage Funding Trust, Series
1998-1, as issuer and First Union National Bank, as indenture
trustee.
In connection with the sale of the Bonds, the Registrant has
been advised by Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Underwriter"), that the Underwriter has
furnished to prospective investors certain yield tables and other
computational materials (the "Computational Materials") with
respect to the Bonds following the effective date of Registration
Statement No. 333-44099, which Computational Materials are being
filed as exhibits to this report.
The Computational Materials have been provided by the
Underwriter. The information in the Computational Materials is
preliminary and may be superseded by the Prospectus Supplement
relating to the Bonds and by any other information subsequently
filed with the Securities and Exchange Commission.
The Computational Materials were prepared by the Underwriter
at the request of certain prospective investors, based on
assumptions provided by, and satisfying the special requirements
of, such prospective investors. The Computational Materials may
be based on assumptions that differ from the assumptions set
forth in the Prospectus Supplement. The Computational Materials
may not include, and do not purport to include, information based
on assumptions representing a complete set of possible scenarios.
Accordingly, the Computational Materials may not be relevant to
or appropriate for investors other than those specifically
requesting them.
In addition, the actual characteristics and performance of
the mortgage loans underlying the Bonds (the "Mortgage Loans")
may differ from the assumptions used in the Computational
Materials, which are hypothetical in nature and which were
provided to certain investors only to give a general sense of how
the yield, average life, duration, expected maturity, interest
rate sensitivity and cash flow characteristics of the Bonds might
vary under varying prepayment and other scenarios. Any
difference between such assumptions and the actual
characteristics and performance of the Mortgage Loans will affect
the actual yield, average life, duration, expected maturity,
interest rate sensitivity and cash flow characteristics of the
Bonds.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial Statements.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits:
99 Computational Materials -- Computational Materials
(as defined in Item 5) that have been provided by the
Underwriters to certain prospective purchasers of the NovaStar
Home Equity Loan Asset Backed-Bonds, Series 1998-1 (filed in
paper pursuant to the automatic SEC exemption pursuant to Release
33-7427, August 7, 1997).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, as amended, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.
NOVASTAR MORTGAGE FUNDING
CORPORATION
By: /s/ David J. Lee
Name: David J. Lee
Title: Vice President
Dated: April 29, 1998
