Newbie wrote:
However, a handyman tells us that in Chicago's climate we can't do this.
According to him, the pipe must remain inside the heated building and
the faucet should just come out of the wall.

Is he right, or with some precaution (like shutting off the water well
before winters) can we have a few feet of pipe outside?

Thanks for all advice.

That handyman is full of shit. Slope the outside pipe at about 2" in 10'
and add a shutoff inside the house. Shut off the line before the first
freeze, and open the outside tap to drain the line. I've had 6' of PVC
outside for 10 years, no problems except when I forgot to turn off the
line early enough. Still suggest wrapping the outside pipe with cheap
foam insulation to help keep the PVC from sun and UV rays.

You might want to check with a plumber- there's some strange city codes
that might apply.