Final answer:
A USDA loan is a type of mortgage that offers 100% financing and must be used in more rural areas.
Step-by-step explanation:
The type of mortgage that can include 100% financing and must be used in more rural areas is called a USDA loan. These loans are insured by the U.S. Department of Agriculture and are specifically designed to help low- to moderate-income borrowers purchase homes in eligible rural areas. One of the key features of USDA loans is that they offer 100% financing, which means borrowers can finance the entire purchase price of the home without needing a down payment.
For example, if a borrower is purchasing a rural home for $200,000, they can borrow the full $200,000 without having to make a down payment. This can be especially beneficial for first-time homebuyers who may not have a large amount of savings for a down payment.