The detailed characterization of near-surface deposits is important for both environmental and economic reasons. These shallow subsurface systems can be very complex and heterogenous due to natural dynamics and anthropogenic interferences. Modeling techniques based exclusively on direct sampling generate limited informed three-dimensional models of the near-surface. Geophysical methods provide valuable and additional information to model the spatial distribution of the near-surface for locations where direct observations are not available. From this set of methods, frequency-domain electromagnetic induction (FDEM) has been successfully applied to image complex near-surface deposits. Yet, predicting the spatial distribution of relevant subsurface properties from geophysical data, and the integration of direct observations, is not straightforward. It requires solving a challenging geophysical inversion problem. Geostatistical modelling tools have been effectively applied to couple direct observations with geophysical data such as seismic reflection. We propose an iterative geostatistical FDEM inversion method able to integrate data from direct measurements of the near-surface with surface loop-loop FDEM measurements to simultaneously predict high-resolution models of electrical conductivity and magnetic susceptibility, and their associated uncertainty. The iterative geostatistical inversion method is based on stochastic sequential simulation and co-simulation as model perturbation and update techniques. The iterative optimization is based on the local data misfit between observed and simulated FDEM data, weighted by the sensitivity of the acquisition equipment. The proposed method is first demonstrated for a synthetic landfill data set created based on real data collected at a mine tailing disposal site in Portugal, and on a real data set collected at a site with archaeological features in Knowlton, UK. The results show the ability of the proposed method to accurately predict and characterize the spatial distribution of electrical conductivity and magnetic susceptibility down to the depth of interest while reproducing the recorded FDEM data.