We study the states arising from the [Ar]4s(2)3d6 and [Ar]4s(1)3d7 configurations of iron atom with explicitly correlated wave functions. The variational wave function is the product of the Jastrow correlation factor times a model function obtained within the parametrized optimized effective potential framework. A systematic analysis of the dependence of both the effective potential and the correlation factor on the configuration and on the term is carried out. The ground state of both, the cation, Fe+, and anion, Fe-, are calculated with correlated wave functions and the ionization potential and the electron affinity are obtained.