NovaStar Mortgage Funding Trust
NovaStar Home Equity Loan Asset-Backed Certificates
Series 2002-3
Statement To Bondholder


FACTOR INFORMATION PER $1000 OF ORIGINAL FACE													PASS-THROUGH
												RATES
		PRIOR								CURRENT
		PRINCIPAL								PRINCIPAL
CLASS	CUSIP	BALANCE		INTEREST		PRINCIPAL		TOTAL		BALANCE			CURRENT			NEXT

A-1	66987XBU8		1,000.000000		1.645000		1.147230		2.792230		998.852770			2.115000	%		2.108750	%




A-2	66987XBV6		1,000.000000		1.711111		0.548368		2.259480		999.451632			2.200000	%		2.193750	%




M-1	66987XBW4		1,000.000000		2.037778		0.000000		2.037778		1,000.000000			2.620000	%		2.613750	%




M-2	66987XBX2		1,000.000000		2.605556		0.000000		2.605556		1,000.000000			3.350000	%		3.343750	%




M-3	66987XBY0		1,000.000000		2.932223		0.000000		2.932223		1,000.000000			3.770000	%		3.763750	%




B	66987XCB9		1,000.000000		5.110000		0.000000		5.110000		1,000.000000			6.570000	%		6.563750	%




AIO	66987XBZ7		1,000.000000		2.270301		0.000000		2.270301		1,000.000000			2.918959	%		—




P	66987XCA1		1,000.000000		—		0.000000		0.000000		1,000.000000			—			—


Seller:		NovaStar Financial, Inc.




Servicer:		NovaStar Mortgage Corporation




Record Date:		October 31, 2002




Distribution Date:		October 25, 2002

Page 1 of 2

NovaStar Mortgage Funding Trust
NovaStar Home Equity Loan Asset-Backed Certificates
Series 2002-3
Statement To Bondholder


Distribution Date:		October 25, 2002


Aggregate Collections From the Mortgage Loans




Available Funds			4,660,943.87




Total Servicer Advances			0.00




Total Compensating Interest			0.00


Aggregate Beginning Principal Balance of Mortgage Loans		403,959,621.37




Aggregate Ending Principal Balance of Mortgage Loans		403,216,110.01




Credit Enhancement Percentage		11.592	%




Cumulative Realized Losses		0.00




Current Realized Losses		0.00




Difference between Swap Notional Amount and Certificates		—




Loan Count		2,853




Prepayment Interest Shortfalls		0.00




Prefunding Account		346,040,479.00




Principal Prepayments		477,545.46




Subsequent Mortgage Loans added (Number/Balance)	0	0.00




Swap Notional Amount		0.00




Weighted Average Mortgage Rate		6.78053	%









Available Funds Cap Carryforward Amount A-1		0.00




Available Funds Cap Carryforward Amount A-2		0.00




Available Funds Cap Carryforward Amount M-1		0.00




Available Funds Cap Carryforward Amount M-2		0.00




Available Funds Cap Carryforward Amount M-3		0.00




Available Funds Cap Carryforward Amount B		0.00









Supplemental Interest Payment to Class A-1		0.00




Supplemental Interest Payment to Class A-2		0.00




Supplemental Interest Payment to Class M-1		0.00




Supplemental Interest Payment to Class M-2		0.00




Supplemental Interest Payment to Class M-3		0.00




Supplemental Interest Payment to Class B		0.00









Unpaid Interest Shortfall Amount to Class A-1		0.00




Unpaid Interest Shortfall Amount to Class A-2		0.00




Unpaid Interest Shortfall Amount to Class M-1		0.00




Unpaid Interest Shortfall Amount to Class M-2		0.00




Unpaid Interest Shortfall Amount to Class M-3		0.00




Unpaid Interest Shortfall Amount to Class B		0.00









Swap Payment to Citibank		947,562.50

Page 2 of 2

NOVASTAR MORTGAGE FUNDING CORP TRUST SERIES 2002-3 8-K