Prepared By R.R. Donnelley Financial -- Form 8-K

UNITED STATES

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): 06/22/2005

NOVASTAR FINANCIAL, INC.

(Exact Name of Registrant as Specified in its Charter)

Commission File Number: 001-13533

MD		74-2830661
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

8140 Ward Parkway, Suite 300, Kansas City, MO 64114

(Address of Principal Executive Offices, Including Zip Code)

816.237.7000

(Registrant’s Telephone Number, Including Area Code)

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act(17CFR240.14a-12)

[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17CFR240.14d-2(b))

[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act(17CFR240.13e-4(c))

Items to be Included in this Report

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

Pursuant to Item 2.03 of Form 8-K, NovaStar Financial, Inc. is hereby filing, as an Exhibit to this current report on Form 8-K, a copy of its press release.

Item 9.01. Financial Statements and Exhibits

(c)- Exhibits

99.1 Press Release dated June 23, 2005 "NovaStar Announces Completion of 2005-N1 NIMs Transaction."

Signature(s)

Pursuant to the Requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the Undersigned hereunto duly authorized.

		NOVASTAR FINANCIAL, INC.


Date: June 24, 2005.	By:	/s/ Gregory S. Metz
		Gregory S. Metz
		Chief Financial Officer

Exhibit Index

Exhibit No.		Description
EX-99.1		Press Release dated June 23, 2005 "NovaStar Announces Completion of 2005-N1 NIMs Transaction."

EX-99.1 2 rrd83581_6512.htm PRESS RELEASE DATED JUNE 23, 2005 "NOVASTAR ANNOUNCES COMPLETION OF 2005-N1 NIMS TRANSACTION." NOVASTAR ANNOUNCES COMPLETION OF 2004-N3 NIMs TRANSACTION NOVASTAR ANNOUNCES COMPLETION OF 2005-N1 NIMs TRANSACTION

KANSAS CITY, MO., June 23, 2005 -- NovaStar Financial, Inc. (NYSE: NFI), a residential mortgage lender and portfolio investor, announced the closing of 2005-N1.

Lead managers RBS Greenwich Capital, Wachovia Securities and Deutsche Bank Securities with co-manager Morgan Stanley, underwrote NovaStar NIM Trust, Series 2005-N1, which closed June 22, 2005. The transaction offered one class of certificates rated A by S&P and A- by Fitch, with a face value of $130,875,000.

About 2005-N1

2005-N1 bonds are collateralized, self-amortizing debt, issued to finance residual securities assets from NMFT 2005-1 and NMFT 2005-2. The bonds are non-recourse in nature and pay a bond equivalent yield of 4.825%. All cash flows from the assets collateralizing the bonds are used to pay interest and principle until the bonds are fully amortized.

About NovaStar

NovaStar Financial, Inc. (NYSE: NFI) is one of the nation's leading lenders and investors in residential mortgages. The company specializes in single-family, nonconforming mortgages, involving borrowers whose loan size, credit details or other circumstances fall outside conventional mortgage agency guidelines. A Real Estate Investment Trust (REIT) founded in 1996, NovaStar efficiently brings together the capital markets, a nationwide network of mortgage brokers and American families financing their homes. NovaStar is headquartered in Kansas City, Missouri, and has lending operations nationwide.

For more information, please reference our website at www.novastarmortgage.com.

Certain matters discussed in this news release may constitute forward-looking statements within the meaning of the federal securities laws that inherently include certain risks and uncertainties. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including general economic conditions, fluctuations in interest rates, fluctuations in losses due to default on the Company's mortgage loans, the availability of nonconforming residential mortgage loans, the availability and access to financing and liquidity resources, and other risk factors outlined in the Company's 2003 annual report on Form 10-K (available on the Company's website or by request to the Investor Relations Contact). Other factors not presently identified may also cause actual results to differ. We continuously update and revise our estimates based on actual conditions experienced. It is not practicable to publish all such revisions and, as a result, no one should assume that results projected in or contemplated by the forward-looking statements included above will continue to be accurate in the future.

Investor Relations Contact

Jeffrey A. Gentle

816.237.7424

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