The storm came ashore with sustained winds near 155 mph, making landfall along the northeastern Nicaraguan coast near the town of Haulover, about 30 miles south of Puerto Cabezas.
The location was approximately 15 miles south of where Category 4 hurricane Eta made landfall just two weeks ago on Nov. 3.
Earlier Monday Iota strengthened into a Category 5 storm as it approached the coast, the National Hurricane Center said.
Nicaragua and Honduras were expected to see storm surge of up to 20 feet.
Over the next few days, rainfall could reach 2 to 3 feet in parts of hard-hit Nicaragua, Honduras, Belize and Guatemala.
Mudslides and flash flooding are expected.
Iota, the strongest hurricane of 2020 to appear in the Atlantic Ocean, is the latest calendar-year Atlantic hurricane on record, surpassing the Cuba Hurricane on Nov. 8, 1932.
Meanwhile, the Northeast is forecast to see the coldest air of the season over the next few days.
The coldest morning is expected to be Wednesday, when it could feel like the upper teens in Boston, near 20 degrees in New York City and in the mid to upper 20s in Philadelphia and Washington, D.C.
With the cold air moving over the relatively mild Great Lakes, lake-effect snow is expected in western Pennsylvania and New York, parts of which could see half a foot of snow over the next 48 hours.
ABC News' Melissa Griffin contributed to this report.