Complicated Situation

Hi everyone. My situation is a bit complicated. My best friend had a very bad home life and came to live with me and my mom when we were in high school. I consider her my sister, but biologically and legally she's not. We recently found out that her younger sister is pregnant. Her sister is also mentally retarded. She is 20 years old but has the mental capacity of an 8 year old. The foster system failed my sister and her siblings as children, sending them back to a home filled with drugs and abuse time and time again. My husband and I have been trying to have children for 2 1/2 years and have recently started the adoption process to adopt a child from Ukraine, but our homestudy hasn't been completed yet, so we still have the option to change our minds about the country we adopt from. Jo (my "sister's" sister) is not able to care for a baby and the person that they think is the father, in my mind should be arrested for statutory rape for taking advantage of her (he's in his 40s or 50s). I'm afraid that if my husband and I don't step up and adopt this baby, that it will be taken from Jo and put into the foster system, or given to Jo's mother (who is still a drug addict). There doesn't appear to be a family history of MR from what I have seen. Personally I suspect that Jo's problems are from her mothers drug and alcohol use during pregnancy. But she is due in June and just now found out she is pregnant, so most likely she has been drinking through the first 5 months of her pregnancy, but no one knows for sure how much. I'm very nervous about the possiblity of a special needs child. Other than spending time with Jo and my husbands niece who is slightly autistic (she's very high function and usually doesnt show many signs of having the disorder at all) I have no experience with this type of thing. I'm afraid that it will be more than we can handle, but I don't want my worrying to deprive a baby of a loving home. If we do adopt this baby, I want it (I hate saying it, but we don't know the gender yet) to have a relationship with Jo, but I don't know how to explain to her what is going on. I know that boundaries are important in an open adoption, but how do you figure out how to set the boundaries in a situation like this. Any advice?