I'd avoid anything "genre" (action/adventure, sci-fi, fantasy, etc.), and I wouldn't mention those pretensions in your essay - at least, not if you want to have a better than slim chance of getting in. If you write really amazing, descriptive, literary/bordering on high falutin' Southern Gothic or gay fiction (without any vampires, witches, trolls, and so on), might be best to just lead with a great writing sample, rather than going into it in your essay. If you're applying to a Southern school - Virginia Tech, University of Virginia, and Virginia Commonwealth are all fully funded or close to it, as I recall - they might be more interested in fiction with a strong Southern bent.
As far as genre-friendly programs, your best bets are North Carolina State, (possibly) Brown University, Rutgers University-Camden, or Southern Illinois University. N.C. State isn't officially fully funded, but rumored to be headed in that direction; Rutgers isn't, but the stipend is pretty generous if you get a teaching assistantship. University of Houston is also rumored to be genre friendly.