Yes 16" wheels will fit and they were offered from the factory. You just have to use the factory backspacing to avoid hitting. Here's a pic of my truck with 16" wheels.

 

Trè bueno!!! That saves me a big headache in finding either 16.5" tires or 17" rims.

Thanks again.

 

I had a 78 F350 with 16'' dual wheels and no problems.

 

My '74 F250 originally came with 16.5s but the owner later changed to stock steel 16s and they clear fine. Mine had dual piston calipers which almost entirely envelope the rotor. Single pistons stick up a bit more so likely less clearance.