From Rap Dictionary
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being hood means you are bad, or regarding to a bad place u are from, such as New York, Detroit, Philadelphia, New Jersey, Chicago, Florida, California,North Carolina (southern area, beginning somewhere in Charlotte) etc.
Hood is usually used like
"Yo my brotha, lets go bounce in da hood." "What you doin in my hood boy?"
'Hood' is also short for Neigbour'hood'