Frequency response function (FRF) identification is often used as a basis for control systems design and as a starting point for subsequent parametric system identification. The aim of this paper is to develop a multiple-input multiple-output (MIMO) local parametric modeling approach for FRF identification of lightly damped mechanical systems with improved speed and accuracy. The proposed method is based on local rational models, which can efficiently handle the lightly-damped resonant dynamics. A key aspect herein is the freedom in the multivariable rational model parametrizations. Several choices for such multivariable rational model parametrizations are proposed and investigated. For systems with many inputs and outputs the required number of model parameters can rapidly increase, adversely affecting the performance of the local modeling approach. Therefore, low-order model structures are investigated. The structure of these low-order parametrizations leads to an undesired directionality in the identification problem. To address this, an iterative local rational modeling algorithm is proposed. As a special case recently developed SISO algorithms are recovered. The proposed approach is successfully demonstrated on simulations and on an active vibration isolation system benchmark, confirming good performance of the method using significantly less parameters compared with alternative approaches.