The UN and several aid agencies are said to be racing against time to finish building more than 30 temporary humanitarian aid camps, at the request of the Kurdish government.
These buildings are needed to facilitate the thousands of Iraqi families who have been staying in schools, disused buildings and open parks before the often harsh Kurdish winter sets in.
Speaking to Premier, Ann Ward, emergency programme consultant at Christian Aid UK, who is based in Sulaymaniyah, Iraq, said: "Immediately, they need somewhere to sleep, so people have been bringing in tents, the communities have been donating homes, the churches have opened up.
"In one of our areas there are about 36 mosques that are hosting families. The communities have been reaching out to support the people, but it's not enough, especially now they have to leave the schools.
"The government is quite strong about this: the schools have to start; kids have to go back to schools. So this is the pressure on building these camps, these extra 30 some camps in the Kurdish area."
Meanwhile, Turkey has said it cannot be expected to lead a ground operation against Islamic State extremists in Syria alone.
Earlier, the UK defence secretary Michael Fallon urged Turkey to get more involved in efforts to defeat the militants, who are threatening a key town close to the Turkish border with Syria.
Islamic State fighters now reportedly control more than a third of the town of Kobani on the Syria-Turkey border.
The battle for power is continuing as both the UK and US admit air strikes alone may not be enough to push back the militants' advance.
This has raised the fresh prospect of a ground offensive.
Hear more from Ann Ward, Christian Aid UK: