Since the income won't appear as taxable on your federal return, it won't appear as taxable on your Iowa return either. Iowa starts with your federal taxable income so the exempt rental income would not show as taxable on the Iowa return.
Per this excerpt from the instructions to Iowa Form IA 1040, Iowa conforms to IRS regulation accept when specific deviations are required. It doesn't mention anything regarding the exempt rental income that you mention, so no adjustment should be required:
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