Document:

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Exhibit 10.7c

                       TENTH AMENDMENT TO MORTGAGE LOAN
                             WAREHOUSING AGREEMENT

     THIS TENTH AMENDMENT TO MORTGAGE LOAN WAREHOUSING AGREEMENT (the
"Amendment") is made as of the 28th day of July, 2000, by and between NOVASTAR
MORTGAGE, INC., a Virginia corporation ("NovaStar Mortgage"), NOVASTAR
FINANCIAL, INC., a Maryland corporation ("NovaStar Financial"), NOVASTAR
CAPITAL, INC., a Delaware corporation ("NovaStar Capital" and, together with
NovaStar Mortgage, and NovaStar Financial, the "Companies") and FIRST UNION
NATIONAL BANK (formerly known as First Union National Bank of North Carolina), a
national banking association (the "Lender").

                              W I T N E S S E T H
                              - - - - - - - - - -

     WHEREAS, the Companies and the Lender are parties to a Mortgage Loan
Warehousing Agreement dated as of November 24, 1997, as amended by a First
Amendment to Mortgage Loan Warehousing Agreement dated as of February 19, 1998,
by a Second Amendment to Mortgage Loan Warehousing Agreement dated as of April
30, 1998, by a Third Amendment to Mortgage Loan Warehousing Agreement dated as
of September 3, 1998, by a Fourth Amendment to and Waiver of Mortgage Loan
Warehousing Agreement dated as of October 15, 1998, by a Fifth Amendment to
Mortgage Loan Warehousing Agreement dated as of November 30, 1998, by a Sixth
Amendment to Mortgage Loan Warehousing Agreement dated as of February 12, 1999,
by a Seventh Amendment to Mortgage Loan Warehousing Agreement dated as of
December 17, 1999, by an Eighth Amendment to Mortgage Loan Warehousing Agreement
dated as of May 30, 2000 and by a Ninth Amendment to Mortgage Loan Warehousing
Agreement dated as of June 30, 2000 (as so amended, the "Credit Agreement"); and

     WHEREAS, the parties wish to amend the Credit Agreement as set forth below;
and

     WHEREAS, subject to and upon the terms and conditions herein set forth, the
Lender is willing to continue to make available to the Companies the credit
facilities provided for in the Credit Agreement; and

     WHEREAS, a specific condition to the willingness of the Lender to continue
to make available to the Companies the credit facilities provided for in the
Credit Agreement is the re-affirmation by the Guarantor of the Guaranty; and

     WHEREAS, the Guarantor will derive a material benefit from the continued
availability to the Companies of the credit facilities provided for in the
Credit Agreement, and therefore the Guarantor is willing to reaffirm the
Guaranty;

     NOW, THEREFORE, in consideration of the premises and agreements contained
herein and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, the parties hereto hereby
agree as follows:
<PAGE>

     1.   Definitions.  All capitalized terms used herein and not otherwise
          -----------
defined shall have the respective meanings provided to such terms in the Credit
Agreement, as amended hereby.

     2.   Amendments to the Credit Agreement.
          ----------------------------------

     a.   The definition of the term "Maturity Date" contained in Section 10 of
          the Credit Agreement is deleted in its entirety and the following
          paragraph is substituted in lieu thereof:

               "'Maturity Date' shall mean the earlier of (a) July 27, 2001, as
                 --------------
          such date may be extended from time to time in writing by the Lender,
          in its sole discretion, and (b) the date the Lender terminates its
          obligation to make further Loans pursuant to the provisions hereof."

     3.   This Amendment shall become effective as of the date hereof, provided
that the Lender shall have received by such date the following items:

          a.   A copy of this Amendment executed by each of the Companies, the
               Guarantor and the Lender (whether such parties have signed the
               same or different copies);

          b.   A reaffirmation of the Guaranty (the "Reaffirmation") executed by
               the Guarantor in favor of the Lender;

          c.   Resolutions of each of the Companies and the Guarantor
               authorizing the execution of this Amendment and the
               Reaffirmation, respectively; and

          d.   A certificate of even date herewith signed by the President, any
               Vice President or the Treasurer of each of the Companies and the
               Guarantor certifying that (i) the articles, bylaws and
               resolutions of each of the Companies and the Guarantor previously
               delivered to Lender remain in full force and effect except as
               provided therein, (ii) each of the Companies and the  Guarantor
               remains in good standing, (iii) all representations and
               warranties of each of the Companies and the Guarantor previously
               made to Lender remain true, complete and accurate, and (iv) no
               Event of Default or Potential Default has occurred and is
               continuing.

     4.   This Amendment is limited, and except as set forth herein, shall not
constitute the modification, acceptance or waiver of any provision of the Credit
Agreement, or any other document or instrument entered into in connection
therewith.

     5.   This Amendment may be executed in any number of counterparts by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which together
shall constitute one in the same instrument. A complete set of counterparts
shall be lodged with each of the Companies and the Lender.
<PAGE>

     6.   This Amendment and the rights and obligations of the parties hereunder
shall be construed in accordance with and governed by the laws of the State of
North Carolina.

     7.   From and after the date hereof, all references in the Credit Agreement
and any other document or instrument entered into in connection therewith, to
the Credit Agreement shall be named to be references to the Credit Agreement as
amended hereby.

     8.   The Guarantor joins in the execution and delivery of this Amendment to
acknowledge and consent to the terms hereof and hereby reaffirms its obligations
under the Guaranty.

     9.   THE LENDER, THE GUARANTOR AND THE COMPANIES EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF ANY PARTY RELATING HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE LENDER TO ENTER INTO THIS AGREEMENT.

           [THE REMAINDER OF THIS PAGE WAS LEFT BLANK INTENTIONALLY]
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.

                                    NOVASTAR MORTGAGE, INC.,
                                    a Virginia corporation

                                    By: ___________________________________
                                    Name:  Rodney E. Schwatken
                                    Title: Treasurer

                                    NOVASTAR FINANCIAL, INC.,
                                    a Maryland corporation

                                    By: ___________________________________
                                    Name:  Rodney E. Schwatken
                                    Title: Treasurer

                                    NOVASTAR CAPITAL, INC.,
                                    a Delaware corporation

                                    By: ___________________________________
                                    Name:  Rodney E. Schwatken
                                    Title: Treasurer

                                    FIRST UNION NATIONAL BANK
                                    (formerly known as First Union National
                                    Bank of North Carolina), a national
                                    banking association

                                    By: ___________________________________
                                    Name: _________________________________
                                    Title: ________________________________

                                    GUARANTOR:

                                    NFI HOLDING CORPORATION,
                                    a Delaware corporation

                                    By: ___________________________________
                                    Name:  Rodney E. Schwatken
                                    Title: Treasurer<PAGE>

Exhibit 10.27

================================================================================

                     MORTGAGE LOAN SALE AND SECURITIZATION
                     TRANSACTION, ADMINISTRATIVE PERSONNEL
                           AND FACILITIES AGREEMENT

                           _________________________

                           Dated as of July 1, 2000

                           _________________________

                           NOVASTAR FINANCIAL, INC.

                                      and

                            NFI HOLDING CORPORATION

================================================================================
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           Page
<S>                                                                        <C>
Section 1.    Transaction Fee............................................     1
Section 2.    Administrative Personnel and Facilities....................     1
Section 3.    Limits of Company Responsibility...........................     2
Section 4.    Terms; Termination.........................................     2
Section 5.    Action Upon Termination....................................     2
Section 6.    Assignment.................................................     2
Section 7.    Notices....................................................     2
Section 8.    No Joint Venture...........................................     3
Section 9.    Amendments.................................................     3
Section 10.   Severability...............................................     3
Section 11.   Entire Agreement...........................................     3
Section 12.   Waiver.....................................................     3
Section 13.   Governing Law..............................................     3
Section 14.   Headings and Cross References..............................     3
Section 15.   Execution in Counterparts..................................     3
</TABLE>

                                       i
<PAGE>

                     MORTGAGE LOAN SALE AND SECURTIZATION
                     TRANSACTION, ADMINISTRATIVE PERSONNEL
                           AND FACILITIES AGREEMENT

     THIS AGREEMENT, made effective as of the 1st day of July, 2000 (the
"Effective Date"), is by and between NovaStar Financial, Inc., Inc., a Maryland
corporation ("REIT"), and NFI Holding Corporation, a Delaware corporation ("NFI
Holding").  References to REIT or NFI Holding herein shall include any wholly-
owned subsidiaries of REIT or NFI Holding from time to time, unless the context
otherwise requires.

                                  BACKGROUND

     A.   REIT owns all of the preferred stock of NFI Holding;

     B.   NFI Holding desires that REIT share with NFI Holding, and REIT desires
that NFI Holding share with REIT, certain administrative personnel and
facilities in connection with the sale and securitization of mortgage loans.

     NOW, THEREFORE, in consideration of the mutual agreements herein set forth,
the parties hereto agree as follows:

     1.   Transaction Fee
          ---------------

          (a) NFI Holding agrees to pay REIT a transaction fee of 0.25% of the
aggregate unpaid balance of the mortgage loans subject to sale or securitization
on the closing date of the sale or securitization.

     2.   Administrative Personnel and Facilities.
          ---------------------------------------

          (a) REIT and NFI Holding agree to share office space and equipment
(including computer equipment), and the services of administrative and other
personnel, and items ancillary to the foregoing, as each may require for
mortgage loan securitizations and for third-party whole loan sale transactions.
REIT and NFI Holding shall monitor the on-going use of facilities and personnel
by REIT and NFI Holding, respectively, and within 15 days after the end of each
fiscal quarter shall agree upon a written allocation (by time used or other
appropriate measure) of facilities used by each and a list of personnel used by
each setting forth a percentage allocation of time devoted by each person to
each party.

          (b) REIT and NFI Holding shall pay to each of their respective share
(as determined by their mutual agreement) of the following expenses that relate
to the provision of any personnel or facilities pursuant to this Section 1:

              (i)    rent (including related local property taxes and property
insurance costs), telephone, utilities, office furniture, equipment and
machinery (including computers, to the extent utilized) and other office
expenses not specifically allocated to the activities of REIT or NFI Holding;
and

                                       i
<PAGE>

              (ii)   personnel expense (including salary, bonuses, benefits and
     taxes); and

              (iii)  other general overhead expenses related to the foregoing.

     Each party shall be responsible for all third-party fees and expenses
billed separately to it, such as accounting and legal fees and expenses.

     3.   Limits of Company Responsibility. Neither party assumes responsibility
          --------------------------------
under this Agreement other than to share the facilities and personnel called for
hereunder in good faith and neither party shall be responsible for any of its
actions hereunder, including those of its shareholders, directors, officers and
employees acting in accordance with this Agreement, except by reason of acts
constituting bad faith, willful misconduct, gross negligence or reckless
disregard of their duties. Each party shall reimburse, indemnify and hold
harmless the other party, its shareholders, directors, officers and employees of
and from any and all expenses, losses, damages, liabilities, demands, charges
and claims of any nature whatsoever in respect of or arising from any acts or
omissions of such party, its shareholders, directors, officers and employees
constituting bad faith, willful misconduct, gross negligence or reckless
disregard of their duties.

     4.   Terms; Termination.  This Agreement shall remain in force until the
          ------------------
second anniversary of the Effective Date, and thereafter, it shall be
automatically renewed for a term of one (1) year unless a written notice is
delivered by either party within 30 days prior to the end of the term or any
renewal term of this Agreement.

     5.   Action Upon Termination.  From and after the effective date of
          -----------------------
termination of this Agreement, each party shall forthwith:

          (a) Agree with the other party on written allocations of facilities
and personnel covering the period following the date of the last quarterly
allocation agreed upon to the date of termination; and

          (b) Based on such allocations, pay over to the other party any money
due for the account of such party pursuant to this Agreement or otherwise.

     6.   Assignment.  This Agreement shall not be assignable by either party
          ----------
without the consent of the other party, except in the case of an assignment by
either party to a corporation or other organization which is a successor (by
merger, consolidation or purchase of assets) to such party, in which case such
successor organization shall be bound hereunder by the terms of said assignment
in the same manner as the party succeeded is bound hereunder.

     7.   Notices.  Any notice, report or other communication required or
          -------
permitted to be given hereunder shall be in writing, unless some other method of
giving such notice, report or other communication is accepted by the party to
whom it is given, and shall be given by being delivered at the following
addresses of the parties hereto:

               REIT:      NovaStar Financial, Inc.

                                       ii
<PAGE>

                                 1901 W. 47/th/ Place, Suite 105
                                 Westwood, KS  66205
                                 Attn:  Rodney E. Schwatken

               NFI Holding:      NFI Holding Company
                                 1901 W. 47/th/ Place, Suite 105
                                 Westwood, KS  66205
                                 Attn:  Rodney E. Schwatken

Either party may at any time give notice in writing to the other party of a
change of its address for the purpose of this Section 10.

     8.   No Joint Venture.  REIT and NFI Holding are not partners or joint
          ----------------
venturers with each other and nothing herein shall be construed to make them
such partners or joint venturers or impose any liability as such on either of
them.

     9.   Amendments.  This Agreement shall not be amended, changed, modified,
          ----------
terminated or discharged in whole or in part, and the performance of any
obligation hereunder may not be waived, except by an instrument in writing
signed by both parties hereto, or their respective successors or permitted
assigns, or otherwise as provided herein.

     10.  Severability.  The invalidity or unenforceability of any provision of
          ------------
this Agreement shall not affect the validity of any other provision, and all
other provisions shall remain in full force and effect.

     11.  Entire Agreement.  This instrument contains the entire agreement
          ----------------
between the parties as to the rights granted and the obligations assumed in this
instrument.

     12.  Waiver.  Any forbearance by a party to this Agreement in exercising
          ------
any right or remedy under this Agreement or otherwise afforded by applicable
laws shall not be a waiver of or preclude the exercise of that or any other
right or remedy.

     13.  Governing Law.  This Agreement shall be governed by, construed under
          -------------
and interpreted in accordance with the laws of the State of Kansas.

     14.  Headings and Cross References.  The section headings hereof have been
          -----------------------------
inserted for convenience of reference only and shall not be construed to affect
the meaning, construction or effect of this Agreement.  Any reference made in
this Agreement to a "Section" or "Subsection" shall be construed, respectively,
as referring to a section of this Agreement or a subsection of a section of this
Agreement.

     15.  Execution in Counterparts.  This Agreement may be executed in one or
          -------------------------
more counterparts, any of which shall constitute an original as against any
party whose signature appears on it, and all of which shall together constitute
a single instrument.  This Agreement shall become binding when one or more
counterparts individually or taken together, bear the signatures of both
parties.

                                      iii
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers as of the day and year first above written.

                                        NOVATAR FINANCIAL, INC.

                                        By: _____________________________

                                        Name:  Scott F. Hartman

                                        Title: Chief Executive Officer

                                        NFI HOLDING CORPORATION

                                        By: _____________________________
                                        Name:  W. Lance Anderson
                                        Title: President

                                       iv

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