Newbie wrote:

We want to instal a faucet outside the building to water the backyard
lawns. (At present we have to run the hose either from inside or around
the building from the front.)

The way the porches, decks, etc are, it would be convenient if teh
faucet was at the side of the wooden porch, about 10' out from the
brick wall.

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.

The trick is that the valve itself is inside the heated area with only
the handle in the cold. They make special valves like this for Chicago
winters.

If you are ever in Schamburg, the Pace Northwest Transportation Center
(off-street bus layover point just south of Woodfield Mall off
Martingale) has water fountains that work all winter; pretty cool. There
is a brief delay before you get water, as the valve is several feet away.

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

My father simply removed the faucet handle for cold weather. On the
house I grew up in, it was a simple spigot with no protection from
freezing at all.