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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                ----------------



                                    FORM 8-K


                                 CURRENT REPORT



                     Pursuant to Section 13 or 15(d) of the

                         Securities Exchange Act of 1934


         Date of Report (Date of earliest event reported) June 25, 1999.
                                                          --------------

                 NovaStar Mortgage Funding Trust, Series 1999-1
           (Issuer in respect of the NovaStar Home Equity Loan Asset-
                           Backed Bonds Series 1999-1)
           ----------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                  Delaware               333-64775             51-6512366
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      (State or other jurisdiction     (Commission           (IRS Employer
          of incorporation)            File Number)        Identification No.)

         c/o First Union National Bank, 230 S. Tryon Street, 9th Floor,
                            Charlotte, NC 28288-1179
         --------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

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

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         (Former name or former address, if changed since last report.)


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Item 5. See the monthly statement to Bondholders attached as Exhibit 20.1 hereto
reflecting the required information for the June 1999 payment to the NovaStar
Home Equity Loan Asset-Backed Bonds Series 1999-1

Item 7.  Financial Statements and Exhibits.

(c) Exhibits.

Item 601 (a) of Regulation.
S-K Exhibit Number.

20.1 Monthly statement to holders of NovaStar Home Equity Loan Asset-Backed
Bonds Series 1999-1 relating to the June 25, 1999 Payment Date.


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                                   Signatures

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on behalf of NovaStar
Mortgage Funding Trust Series 1999-1 by the undersigned thereunto duly
authorized.



Dated:  July 9, 1999         By:    First Union National Bank, as Indenture
                                    Trustee and on behalf of NovaStar Home
                                    Mortgage Funding Trust Series 1999-1

                                    BY: Robert Ashbaugh
                                        ---------------
                                        Vice President


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                                  EXHIBIT INDEX




20.1 Monthly statement to holders of NovaStar Home Equity Loan Asset-Backed
Bonds Series 1999-1 relating to the June 25, 1999 Payment Date.



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