Master Repurchase Agreements Waiver

                                                                  
EXECUTION COPY







                                December 7, 2007

NovaStar Mortgage, Inc.
NovaStar Certificates Financing LLC
NovaStar Certificates Financing Corporation
NFI Repurchase Corporation
NMI Repurchase Corporation
NMI Property Financing, Inc.
HomeView Lending, Inc.
NovaStar Financial, Inc.
NFI Holding Corporation
8140 Ward Parkway,
Suite 300
Kansas City, Missouri 64114


         Re:      
Master Repurchase Agreements Waiver


     Reference is made to those certain Master  Repurchase 
Agreements listed on
Schedule I attached hereto (the  "
Agreements
").  Capitalized  terms used in this
letter agreement  without  definition have the meanings  ascribed
to them in the
Agreements.

     Effective  as of the date  hereof and until  January  4, 2008
(the  "Waiver
Period") and subject to the limitations set forth herein, each
Buyer hereby:

     A.        1.   Agrees  not  to  enforce  the   requirements  
for  NovaStar
                    Financial,  Inc.  ("NFI") to  maintain  a
required  Adjusted
                    Tangible Net Worth under the Agreements;

               2.   Waives  any breach  and/or  any event of
default  that would
                    otherwise  arise under the Agreements  solely
as a result of
                    the failure of NFI to have the  required 
Adjusted  Tangible
                    Net Worth specified in the Agreements; or

               3.   Agrees that in the Monthly  Certificates 
delivered  by NFI,
                    NFI may carve-out the  certification  solely
relating to the
                    Adjusted  Tangible Net Worth for the previous
month and each
                    Buyer hereby  waives any breach and/or event of
default that
                    would  otherwise  arise under the  Agreements
as a result of
                    such carve-out from the Monthly Certifications.

      B.       1.   Agrees,  during  the  Waiver  Period,  not  to 
enforce  the
                    requirements  for  NovaStar   Financial,   Inc.
 ("NFI")  to
                    maintain Liquidity in an amount not less than
$30,000,000 as
                    specified under the

                                           Wachovia NovaStar TNW
Waiver 12-07-07

                    Agreements;  provided that NFI agrees to
maintain  Liquidity
                    that could be drawn  against  (taking into
account  required
                    haircuts) in an amount not less than
$24,000,000;

               2.   Waives  any breach  and/or  any event of
default  that would
                    otherwise  arise under the Agreements  solely
as a result of
                    the  failure of NFI to maintain  Liquidity  in
an amount not
                    less than  $30,000,000  during the Waiver 
Period;  provided
                    that NFI maintains  Liquidity in an amount not
less than the
                    $24,000,000 during the Waiver Period;

               3.   Agrees that in the  Monthly  Certificates 
delivered  by NFI
                    during   the   Waiver   Period,   NFI  may  
carve-out   the
                    certification   solely   relating  to  the  
maintenance  of
                    Liquidity  in an amount  not less than 
$30,000,000  for the
                    previous  month and each  Buyer  hereby  waives
 any  breach
                    and/or event of default that would otherwise
arise under the
                    Agreements  as a result of such  carve-out 
from the Monthly
                    Certifications;  provided that NFI maintains
Liquidity in an
                    amount  not  less  than   $24,000,000  for 
such  month  and
                    certifies that it has maintained  such amount
in the Monthly
                    Certification.

Notwithstanding  anything  to the  contrary  herein,  all parties 
bound  herein
acknowledge  and agree that the Buyers,  shall retain all rights
and remedies in
order to  enforce  any Event of  Default  or other  breach 
contemplated  by the
Agreements.

     Notwithstanding  the  occurrence  and  continuance  of the
NFI's failure to
maintain the required  Adjusted  Tangible Net Worth or  maintenance
of Liquidity
under the Agreements  described above, each Buyer is willing to
waive certain of
its  rights;  
provided
  that  each  Buyer  reserves  the  right to  unilaterally
terminate this letter  agreement on or prior to January 4, 2008, 
without notice
to any party,  based upon the  occurrence of any Event of Default
or breach that
occurs under the  Agreement