First heard it in Missouri... now here in VA so it must be a southern kinda thing... though officailly Missouri isn't a southern State though those in Missoura would disagree with you... or burn a cross in your front yard...
Reminds me of when we were going thru the bootheel of Missouri and as we were on the on ramp to the interstate I see this huge saign that says "FAGS" ... I am thinkning jeez that takes a lot of balls to be so publicly "politically incorrect"...
up the road on the frontage road next to the freeway I see a business with a sign that says FAGS washers (as in bolt, nut and washer).
Next what came to mind was seeing a big hulk of a guy drinking in a bar on vacation and another guy asking him what he does for a living and he replies.
"Oh, I work for Fags."