In the Database Server section, select SQL Server LocalDB from the Server Type: pulldown.
Click Next, and continue with Step 4: Runtime configuration.
The SQL Server LocalDB option is available only if you have Microsoft SQL Server 2016 LocalDB installed on the server. For SQL Server LocalDB, all configuration of the database/connection is managed automatically. There is an option to install SQL Server 2016 LocalDB when you run SAM_setup.exe.