THE first Little House children to be adopted overseas, Billy and Anne, leave tomorrow for their new home in the United States. The brother and sister have spent every waking hour since Sunday with their adoptive parents, Craig and Merilynn Pearsall, who have come from Oregon to collect them. The Little House in Pinehill Village in Tai Po was set up four years ago by the Hongkong Association for the Mentally Handicapped and is designed to give orphaned mentally handicapped children a chance to have a normal family life and improve their chances of adoption overseas. The association was the beneficiary of the RTHK/South China Morning Post Operation Santa Claus 1992, which raised more than $4 million. Some of that money will fund a second Little House, which is nearing completion in the grounds of Pinehill. House-parents Billy and Eliza Lee knew before they became Mum and Dad at the Little House that they could lose some of the eight children, but these first adoptions have proved to be something of a crisis. Father Billy has not slept for several nights and mother Eliza's eyes are red and swollen from weeping. The children themselves are in two minds about leaving the only home they have known. Billy, 10, and Anne, eight, were raised separately and did not know of each other's existence until they arrived at Pinehill four years ago. Billy can't get away fast enough and is so excited about the adoption, he babbles non-stop. ''I'm going to America on Thursday. My big sister, Jennifer, is waiting for me and I will have one more sister and two brothers,'' he said last night at a farewell party. Anne, normally the talkative one, was more reticent. It was obvious she would miss the parents at the Little House much more than she could express. While her brother perched happily on Mr Pearsall's knee, she was visibly torn between Mrs Lee and Mrs Pearsall. The Pearsalls, a down-to-earth couple in their mid-thirties, noticed Anne's dilemma and agreed it would take ''a great deal of patience'' to help her through the first weeks and months. Mr Pearsall is a government land surveyor, who manages to get home at lunchtime almost every day. Mrs Pearsall was a substitute teacher until four years ago, when she gave it up to become a full-time mother. Their family consists of a daughter, Jennifer, 12, and adopted children Chelsea, 10, Brendon, eight and Alex, six - all from Korea. Billy and Anne were placed through the International Social Service Hongkong Branch (ISS), which has the difficult task of finding homes for the ''hard to place'' wards of the Social Welfare Department. They were approached about Billy and Anne 20 months ago. Yesterday, Ms Ruyika Kwok, an ISS social worker who has been involved in the case from the beginning, said the agency had seen a noticeable drop in the number of adoptions from Hongkong over the last three years because more locals were adopting, fewer children were being abandoned and the birthrate had dropped.