The California-based comedian and rapper - who goes by the name Lil Phag - posted a photograph on Twitter of himself alongside a town sign saying "Welcome to Gay Hell .... Michigan's Hysterical Town."
"As of today, I am now the owner of Hell, Michigan. I bought the whole town," he tweeted to his 600,000 followers.
"And my first act as owner, I have renamed my town to Gay Hell, MI. The only flags allowed to fly are pride."
The White House has refused to allow embassies to fly rainbow flags on their flagpoles this year, leading several overseas missions and state governors to post images online of rainbow banners and pennants decorating their offices.
A spokeswoman for the country's top diplomat, Mike Pompeo, who opposes gay marriage, confirmed the ban last week.
"The Secretary (of State) has the position that - as it relates to the flagpole - that only the American flag should be flown there," Morgan Ortagus told a news conference.
The Midwestern town of Hell said on its website that its name originated from a 19th century mill owner paying farmers in whisky, and it now offers tourists numerous hell-themed hotspots, such as Damnation University and the Hell Hole Diner.
Real estate firm Re/Max Commercial listed the 5-acre town of Hell for sale for $900,000 on its website.
Daniel became Mayor of Hell for one day in 2017 - one of the tiny town's tourist gimmicks - and announced that he had banned all heterosexuals from it.
"We want to ensure that we are not admitting into our town the very heterosexual threats we are fighting against," he said on Twitter.
"The straights coming into our town (are) procreating, having more straight children to take our rightfully gay jobs ... Thank you for your cooperation in this tough time, together we will Make Hell Great Again."