Definitely recommended for anyone looking to get into section 8 in Chicago.My question is this - Is a closet in a bedroom mandatory, and is it counted towards bedroom square footage?

Mina NA without knowing any local laws or regulations with renting property in your area (city inspections, requirements, etc).I typically have found that if you do not have legal bedrooms with egress, closets etc.

Original Floor PlanMy visionIf I moved the wall for the closet out a little I can add a 5x7 bathroom to to the house.

I have at least one rental house where the panel is in a bedroom closet - when it comes time to replace it, we will flip the panel to the outside as well (it is located along an outside wall already, just inside the closet). 

I looked at some of this type of housing in Hattisburg MS  a while back I thought this was a cool plan these were new.house was a basic rectangle.. came in the front door kitchen to the right galley style  then you had a great roomoff of the great room there were 4 doors 2 on each side leading straight into bedrooms that also had private baths and closets.. so each student had their own space.. central area for TV and social and one kitchen and table to eat on.Very basic design easy to build.. and these had scored concrete floors so little more to build but no replacing carpet when beer bongs spill over.. :)  no carpet at all in the house.Just have to put a few more toilets and showers in.. 

I even open all closet doors.Good Luck. 

@Matt Nico it was a single family flip, I did add a 1/2 bath to the upper floor inside an old useless closet, then another 1/2 bath on the 1st floor plus this as a 1st floor master bath off the lower master bedroom.

The seller is flipper that converted what was enclosed porch areas to a bedrooms by removing double sliding doors and enclosing it with walls, and also added closets.

We supply our cleaning supplies (kept in a locked owner's closet). 

I thought the encounter went well besides the point at the end he started bringing up little things he wanted fixed like the blinds, the covers to the baseboard heat, and a closet door that lost the wheels to stay on its track which I thought was weird.