I suspect you are misreading something. The HAND fee on all loans through Citi is a flat $500. You may be adding in the contingency funds that are factored in, budgeting an extra 10% on top of the rehab amount to cover unforeseen items.
Contact the HAND department directly for clarification at 210-319-2978.
Why is it different for Citi vs, BoA? This seems like something that would be universal since we don’t have a choice over which lender we finance through. I’m doing a renovation that’s over 100k and $3000+ is a far cry from $500.