There were plans to extensively refit the Iraqi army with surplus US equipment, including M1A1 tanks and F16 fighters, but that was before the three years of insurgent bloodshed shifted the priority from armoured divisions to intervention teams and crowd-control units.
Meanwhile, most of the old prewar stocks were definitely scrapped when the army was disbanded in 2003. It seems like the CPA doesn't really want an indigenous weapon-building capability in Iraq right now. This means that the new Iraqi army has to rely on foreign new materials.
Several countries in the region provide that kind of help with US assent,
like Jordan.
Other source: the various allied peacekeeping contingents which came on the field with outdated or unpractical materials and decided to leave them standing there, offering them to the Iraqi security forces. For example
Poland has promised to let the 6 Mi-24W and other helicopters it is using there, and some quantity of armor too IIRC. The Polish government has arranged for a sale of some sort too, and it sounds like a contract on modernising T-72s has just been scrapped.
China is also actively advertising for its capacity to provide cheap new stuff at unbeatable prices, and apparently a contract has been awarded for loads of "newest" Type-56-II rifles, and Norinco industrial company is pushing hard to do the same with other equipment, like
medium-caliber MGs or bulletproof jackets.
And if you are looking for cheap recent Soviet-style gear and are wary of the implications of Chinese imports (like some US commentators are), you shouldn't turn a blind eye to the three quarters or the former-communist Eastern Europe countries which are now perfectly US-friendly and soon or already NATO members.
As you see, there is no real shortage of suppliers for the Iraqi forces, and probably there are more weapons available than what Iraq can currently afford!