Joined: Nov 2006
Posts: 19,810
Likes: 597
From: NJ, NYC, LI
Bikes: 1940s Fothergill, 1959 Allegro Special, 1963? Claud Butler Olympic Sprint, Lambert 'Clubman', 1974 Fuji "the Ace", 1976 Holdsworth 650b conversion rando bike, 1983 Trek 720 tourer, 1984 Counterpoint Opus II, 1993 Basso Gap, 2010 Downtube 8h, and...
A folding bike is definitely worth looking at. 20" wheels are not an issue; the gearing has to be slightly different, and tires wear out a little faster, but a well designed folding bike can be as good as anything.
I'm not sure what you'll get for $400. I think my current folding bike cost a bit more than that.
I am fond of Downtube bikes (that's a brand). They are primarily an on-line seller (and the owner/ designer is a forum member).