Exhibit 35.1

NovaStar Mortgage, Inc.
8140 Ward Parkway Suite 300
Kansas City, MO 64114

                                                                 [NovaStar Logo]

                             NOVASTAR MORTGAGE, INC.
                         OFFICER'S CERTIFICATE REGARDING
                         ANNUAL STATEMENT OF COMPLIANCE

                                 March 11, 2008

Matthew Kaltenrieder, Vice President Finance, and Todd Phillips, Vice President
Treasurer and Controller (Chief Accounting Officer) hereby certify that they are
duly appointed Servicing officers of NovaStar Mortgage, Inc., a Virginia
corporation, (the "Servicer") and further certify as follows:

      (i)   We have reviewed the Servicer's activities during the period of
            January 1, 2007 through October 31, 2007 and the Servicer's
            performance under the various Pooling and Servicing Agreements and
            Sale and Servicing Agreements (see attached Exhibit A) under which
            the Servicer is party has been made under my supervision,

      (ii)  To the best of the Servicing Officer's knowledge, based on such
            review, the Servicer has fulfilled its obligations under the various
            Pooling and Servicing Agreements (see attached Exhibit A) in all
            Material respects for such year, except as follows: Certain
            advances of funds or guarantees regarding collections, cash flows
            or distributions, and any interest or other fees charged for such
            advances were not made as specified in the transaction agreements.
            Specifically, a process for prepayment penalty collection
            guarantees, for loans which had twenty percent or more of the
            principle balance paid off in a twelve month period, was not
            developed. Of 45 reconciliations tested, four reconciliations for
            asset-backed securities related bank accounts, including custodial
            accounts and related bank clearing accounts, did not appropriately
            contain explanations for reconciling items and one reconciliation
            contained a reconciling item that was not resolved within 90
            calendar days of its original identification.

      (iii) No Subservicers have performed any duties on behalf of NovaStar
            Mortgage, Inc.


/s/ Matt Kaltenrieder
----------------------------------------
Matt Kaltenrieder
Vice President Finance

/s/ Todd Philips
----------------------------------------
Todd Philips
Vice President, Treasurer and Controller (Chief Accounting Officer)

<PAGE>

NovaStar Mortgage, Inc.
8140 Ward Parkway Suite 300
Kansas City, MO 64114


NovaStar Mortgage, Inc.
Exhibit A to Certificate of Officer
March 11, 2008

Description                                              Date of Agreement
------------------------------------------------------   -----------------------
Pooling and Servicing Agreements:
   NovaStar Mortgage Funding Trust, Series 2002 - 3      September 1, 2002
   NovaStar Mortgage Funding Trust, Series 2003 - 1      February 1, 2003
   NovaStar Mortgage Funding Trust, Series 2003 - 2      June 1, 2003
   NovaStar Mortgage Funding Trust, Series 2003 - 3      September 1, 2003
   NovaStar Mortgage Funding Trust, Series 2003 - 4      November 1, 2003
   NovaStar Mortgage Funding Trust, Series 2004 - 1      March 1, 2004
   NovaStar Mortgage Funding Trust, Series 2004 - 2      June 1, 2004
   NovaStar Mortgage Funding Trust, Series 2004 - 3      September 1, 2004
   NovaStar Mortgage Funding Trust, Series 2004 - 4      November 1, 2004
   NovaStar Mortgage Funding Trust, Series 2005 - 1      February 1, 2005
   NovaStar Mortgage Funding Trust, Series 2005 - 2      May 1, 2005
   NovaStar Mortgage Funding Trust, Series 2005 - 3      September 1, 2005
   NovaStar Mortgage Funding Trust, Series 2005 - 4      December 1, 2005
   NovaStar Mortgage Funding Trust, Series 2006 - 2      June 1, 2006
   NovaStar Mortgage Funding Trust, Series 2006 - 3      June 1, 2006
   NovaStar Mortgage Funding Trust, Series 2006 - 4      August 1, 2006
   NovaStar Mortgage Funding Trust, Series 2006 - 5      September 1, 2006
   NovaStar Mortgage Funding Trust, Series 2006 - 6      December 1, 2006
   NovaStar Mortgage Funding Trust, Series 2007 - 1      February 1, 2007
   NovaStar Mortgage Funding Trust, Series 2007 - 2      May 1, 2007

Sale and Servicing Agreements:
   NovaStar Mortgage Funding Trust, Series 2006 - 1      April 1, 2006
   NovaStar Mortgage Funding Trust, Series 2006 - MTA1   May 1, 2006