EXHIBIT 5.1


                                         October 10, 1996



Litchfield Financial Corporation
789 Main Road
Stamford, Vermont 05352

Ladies and Gentlemen:

         In connection with the proposed  registration  under the Securities Act
of 1933, as amended, of 349,768 shares of Common Stock, par value $.01 per share
of  Litchfield   Financial   Corporation,   a  Massachusetts   corporation  (the
"Company"),  proposed to be sold by certain Selling Stockholders of the Company,
we have  examined  such  corporate  records and other  documents,  including the
Registration  Statement on Form S-3  relating to such shares (the "Registration
Statement"),  and have reviewed such matters of law as we have deemed  necessary
as a basis for the opinion as hereinafter expressed.

         Based   upon  the   foregoing   and   having   regard  for  such  legal
considerations as we deem relevant, we are of the opinion that:

         1. The Company is a corporation validly existing under the laws of the
            Commonwealth of Massachusetts.

         2. The Company is authorized to issue 8,000,000 shares of common
            stock with a par value of $.01 per share (the "Common Stock").

         3. The 349,768  shares of Common Stock proposed
            to be sold by the Selling  Stockholder named
            in the Registration Statement have been duly
            authorized  and are  validly  issued,  fully
            paid and non-assessable.

                                                





         We hereby  consent to the  filing of this  opinion as an exhibit to the
Registration  Statement on Form S-3 and to the reference to us under the caption
"Legal Matters" in the Registration Statement.

                                       Very truly yours,

                                        /s/Hutchins, Wheeler & Dittmar
                                       HUTCHINS, WHEELER & DITTMAR
                                       A Professional Corporation