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                         NOVASTAR MORTGAGE FUNDING TRUST
                  NovaStar Home Equity Loan Asset-Backed Notes
                                  Series 2000-1

        ANNUAL STATEMENT TO BONDHOLDER FOR YEAR ENDING DECEMBER 31, 2000

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

   A-1   216,200,000.00 216,200,000.00 10,848,215.61 13,916,480.87 24,764,696.48    0.00    0.00    202,283,519.13
   M-1     4,600,000.00   4,600,000.00    246,585.75          0.00    246,585.75    0.00    0.00      4,600,000.00
   M-2     2,760,000.00   2,760,000.00    161,356.61          0.00    161,356.61    0.00    0.00      2,760,000.00
   M-3     2,760,000.00   2,760,000.00    190,229.27          0.00    190,229.27    0.00    0.00      2,760,000.00
  A-IO   229,958,462.70 229,958,462.70 74,209,383.60          0.00  4,209,383.60    0.00    0.00    216,083,519.20
    O      3,680,000.00   3,680,000.00          0.00          0.00          0.00    0.00    0.00      3,680,000.00
    P            100.00         100.00    170,311.92          0.00    170,311.92    0.00    0.00            100.00
    R              0.00           0.00          0.00          0.00          0.00    0.00    0.00              0.00
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TOTALS   459,958,562.70 226,320,000.00 15,826,082.76 13,916,480.87 29,742,563.63    0.00    0.00    212,403,519.13
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                               FACTOR INFORMATION PER $1000 OF ORIGINAL FACE
                         PRIOR                                                   CURRENT
                       PRINCIPAL                                                PRINCIPAL
  CLASS      CUSIP      BALANCE        INTEREST    PRINCIPAL        TOTAL        BALANCE
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   A-1     66987WAG2  1,000.000000    50.176760    64.368552     114.545312     935.631448
   M-1     66987WAH0  1,000.000000    53.605598     0.000000      53.605598   1,000.000000
   M-2     66987WAJ6  1,000.000000    58.462540     0.000000      58.462540   1,000.000000
   M-3     66987WAK3  1,000.000000    68.923649     0.000000      68.923649   1,000.000000
  A-IO     66987WAL1  1,000.000000    18.304974     0.000000      18.304974     939.663262
    O         N/A     1,000.000000     0.000000     0.000000       0.000000   1,000.000000
    P         N/A          -            -            -             -               -

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Seller:                                   NovaStar Financial, Inc.
Servicer:                              NovaStar Mortgage Corporation


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