Finding a good bike at that price range leaves you with looking at craigslist for used bikes.

I owned a 16 inch wheeled citizen bike and it developed a crack at the seatpost after some very light use, I think I was weighting in at 190 lbs around that time. Gave it away to my aunt and don't know what became of it.

I've owned a Downtube 8fs for about 2 years before I bought the citizen and it's served me well without issues, bought originally for $300 from the Downtube page.

Wheel size doesn't really matter, both will be strong but finding replacement parts for the 20 inch wheels is much easier since it's a popular wheel size thanks to the BMX crowd.