##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

|               |  |                                                                                     
|-------------- |  | ------------------------------------------------------------------------------------
|(Mark One)
[X] |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002

|      |  |                                                                                         
|----- |  | ----------------------------------------------------------------------------------------
|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

|                               |  |  |  |    |  |  | 
|------------------------------ |  |  |  | -- |  |  | 
|For the transition period from |  |  |  | to |  | 
|                               |  |  |  |    |  | 

Commission file number 333-50290

NovaStar Mortgage Funding Trust,
Series 2002-1
(Issuer in respect of the NovaStar Home Equity Loan Asset-Backed Bonds, Series
2002-1)

---

(Exact name of registrant as specified in its charter)


|                                                                            |  |                                     
|--------------------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                                    |  | 46-0479702                          
|                                                                            |  |                                     
|(State or other jurisdiction of
incorporation or organization)              |  | (I.R.S. Employer Identification No.)
|                                                                            |  |                                     
|c/o Wachovia Bank, 401 S. Tryon Street
9th Floor, Charlotte, North Carolina |  | 28288-1179                          
|                                                                            |  |                                     
|(Address of principal executive offices)                                    |  | (Zip Code)                          

Registrants telephone number, including area code:     (704) 383-9568

|                                                            |  |     
|----------------------------------------------------------- |  | ----
|Securities registered pursuant to Section 12(b) of the Act: |  | None
|Securities registered pursuant to Section 12(g) of the Act: |  | None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.    Yes [X]    No [    ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrants knowledge
indefinitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.    [X]





---



##### 



INTRODUCTORY NOTE

This Form 10-K has been prepared with modified disclosure in accordance
with past exemptions from the reporting requirements granted by the Securities
and Exchange Commission under the Securities Exchange Act of 1934 for issuers
substantially similar to the Registrant. Items designated herein as Not
Applicable have been specifically omitted in reliance on such prior
exemptions.

B-2



---



##### 



PART I

Item 1. BusinessNot Applicable.

Item 2. PropertiesNot Applicable

Item 3. Legal Proceedings.The Indenture Trustee is not aware of any material pending legal
proceedings involving either the Registrant, the Indenture Trustee, the
Owner Trustee or the Servicer with respect to the Bonds or the
Registrants property.

Item 4. Submission of Matters to a Vote of Security Holders.No vote or consent of the holders of the Bonds was solicited for any
purpose during the year ended December 31, 2002.

PART II

Item 5. Market for Registrants Common Equity and Related Stockholder Matters.To the best knowledge of the Indenture Trustee, there is no established
public trading market for the Bonds. As of the date hereof, Cede & Co.,
the nominee of the Depository Trust Company (DTC), was the only holder
of record of the Bonds. DTC holds the Bonds for the accounts of others.

Item 6. Selected Financial Data.Not Applicable.

Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operation.Not Applicable.

Item 7A. Quantitative and Qualitative Disclosures About Market Risks.Not Applicable.

Item 8. Financial Statements and Supplementary Data.Not Applicable.

Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.None.

B-3



---



##### 



PART III

Item 10. Directors and Executive Officers of the Registrant.Not Applicable.

Item 11. Executive Compensation.Not Applicable.

Item 12. Security Ownership of Certain Beneficial Owners and Management.The Indenture Trustee is not aware of any Schedule 13D or 13G filings
with the Securities and Exchange Commission in respect of the Bonds

Item 13. Certain Relationships and Related Transactions.None or Not Applicable.

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.



| | (a) |  | The following documents are filed as part of the report
| | --- |  | -------------------------------------------------------

(1) Financial Statements
Not Applicable.

(2) Financial Statement Schedules
Not Applicable.



| | (b) |  | The Registrant filed the following current reports on Form
8-K for the fourth quarter of 2000:
| | --- |  | ----------------------------------------------------------------------------------------------

|                |  |               |  | 
|--------------- |  | ------------- |  | 
|Date of Reports |  | Items Covered
|                |  |              
|None           



| | (c) |  | Exhibits*.
| | --- |  | ----------

|     |  |                                                                       
|---- |  | ----------------------------------------------------------------------
|99.1 |  | Annual Statement to Bondholders for the period ended December
31, 2002
|99.2 |  | Officers Certificate of Servicer                                     
|99.3 |  | Annual Accountants Report                                            
|99.4 |  | Annual Certification                                                  



| | (d) |  | Additional financial statements
| | --- |  | -------------------------------
|

| |  | (1) |  | Separate Financial Statements of subsidiaries not
consolidated and fifty-percent-or-less persons.
| |  | --- |  | -------------------------------------------------------------------------------------------------

None.



| |  | (2) |  | Affiliates whose securities are pledged as
collateral.
| |  | --- |  | ------------------------------------------------------

None.



| |  | (3) |  | Schedules.
| |  | --- |  | ----------

None.

B-4



---



##### 



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Indenture Trustee has duly caused this report to be
signed on behalf of the Registrant by the undersigned, thereunto duly
authorized.

|                      |  |                                                                                                             |  |                                            
|--------------------- |  | ----------------------------------------------------------------------------------------------------------- |  | -------------------------------------------
|                      |  | WACHOVIA BANK, as Certificate
Administrator  and on behalf of
NovaStar Mortgage Funding Trust
Series 2002-1
|                      |  |                                                                                                             |  |                                            
|Dated: March 28, 2003 |  |                                                                                                             |  |                                            
|                      |  | By:                                                                                                         |  | /s/ Robert Ashbaugh                        
|                      |  |                                                                                                             |  |                                            
|                      |  |                                                                                                             |  | Name: Robert Ashbaugh
Title: Vice President

B-5





---



##### 



INDEX OF EXHIBITS

|     |  |                                                                       
|---- |  | ----------------------------------------------------------------------
|99.1 |  | Annual Statement to Bondholders for the period ended December 31, 2002
|99.2 |  | 99.2 Officers Certificate of Servicer                                
|99.3 |  | 99.3 Annual Accountants Report                                       
|99.4 |  | Annual Certification                                                  

B-6