We have to do the same thing. After I talked to the guy that did the original appraisal and will do the final, he said he just comes to ensure the builder did what he said he was going to do (i.e. The original appraisal is done based on solid hardwood floors and the builder did vinyl, or house plans call for 3000 Sq ft and the builder only did 1200) stuff that would draw the price of the house WAY down and deviations from the original appraisal. He said it's just a final Follow-up for the bank to make sure they got exactly what they loaned for.

It'd be the same thing as you going to the bank and borrowing the money to buy a new Ferrari and instead bought a prius

http://www.bing.com/search?q=442+appraisal&qs=AS&pq=442+app&sc=3-7&sp=1&FORM=QBLH&cvid=49b06774eab7409597c47ca6bc0b36d6

We are doing a one time close that does not require that final inspection. That would worry me, I understand they need to make sure the house is actually being built to contract specs but that is what the inspections are prior to the draws.

We built in the middle of the 2nd real estate bubble in our area 2 years ago (moved in May of '13). Initial appraisal went very well, mortgage lender was happy. It took 14 months to finish the house by then the market had shifted significantly and we were ~100k under the initial appraisal (very rural NW Oregon). It didn't work out great, we have the house but had to come up w/a significant amount of $$ to close.
I think the potential for a market shift is always a reality and depending on the time it takes to build it could be significant. If you think about it an initial appraisal is based on the market and what 'will' be built (the potential), I don't know how it can be predictably forecast for market downturns unless there's some fudge w/the initial appraisal. Now if it only takes 90-120 days to build a home, it would probably still be in the ballpark. However over a year or more there's a real chance things will change. In the past (~7-8 years ago) you could probably count on a higher appraisal over a given length of time. I wouldn't count on that these days.
All of the above is market dependent, I happen to live in an area that is still trying to recover values from 5-6 years ago. I'm sure yours will go better than mine.

Thank you everyone for your comments. The loan was marketed as as a one time close loan, but I'm not sure it is. They do require that final appraisal/inspection and claim that every single construction loan in the country requires this form. Is this true? I know what this form is... I just don't understand if it is required by all the other banks (e.g. US Bank) too in their "one time close" loans. I thought the whole purpose of a one time close was to avoid the chance of the bank taking your house away at their whim (or their appraisers) after the build. And with banks, everything is a whim.

They did confirm they will not be "pulling credit" again, so it isn't an entirely sep. escrow or anything. But still very worried after Mistman's story. (Thanks for sharing Mistman!)

Any others who have had to go through the 442 with their loans that have opinions?

I am not done yet but I looked through ours and I see nothing mentioning another appraisal or 442. I could've missed it though. Those contracts are crazy long. Call another company and inquire with them if 442 is standard for them. I had a friend in the construction loan side of things help find me a loan and walk me through stuff. I hope mine doesn't have one....... Let us know how it goes.

MFatt16- I know those contracts are so long! Our contract said nothing about the 442. Just that the bank reserves the right to order a 2nd appraisal (in the fine print). It was so vague we are still waiting on clarification. So look for broad language. But honestly, I think most "one-time" close loans do not require this. They confirm completion to specs with the draws. I'll post how it goes for sure.

As a lender, I can verify, based on the type of loan, a 442 would be needed just as 'Guitarman52' stated and all for the reasons he stated.

I thought all a one-time close meant was that you only have to pay closing costs one time rather than having anything to do with appraisals.