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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


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                                    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) AUGUST 25, 1999.
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                 NovaStar Mortgage Funding Trust, Series 1999-1
           (Issuer in respect of the NovaStar Home Equity Loan Asset-
                           Backed Bonds Series 1999-1)
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             (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
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               (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 AUGUST 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.
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20.1 Monthly statement to holders of NovaStar Home Equity Loan Asset-Backed
Bonds Series 1999-1 relating to the AUGUST 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:  SEPTEMBER 21, 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 AUGUST 25, 1999 Payment Date.



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