A phrase intended to promote the acceptability of queerness, while concurrently serving to counter the blatant homophobia framing the term "no homo". The actual sexual orientation of the person who uses the term is irrelevant, as its use is to affirm the "OK'ness" of "homo" (as opposed to affirming one's own identification as a "homo"). The term is used in all verbal arrangements in which one would use the term, "no homo".
Person 1: Sarah, let's eat out tonight... so homo.
Person 2: I'm down if we go to a good mexican restaraunt.
Person 1: I love McNabb, so homo... because he's a great quarter backs and he's got some class and tact.
Person 2: That's cool but, personally, I'm wanting to see what happens with Vic.
Person 1: Fuck you dude, you can just suck my dick... so homo. No more comments about what happened between me and Sarah.
Person 2: Alright, alright... I was just playing around.