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                                                                     EXHIBIT 5.1
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                                            October 22, 1997


Litchfield Financial Corporation
789 Main Road
Stamford, Vermont 05352



Ladies and Gentlemen:

     In connection with the registration under the Securities Act of 1933, as
amended, of an aggregate of $51,750,000 in principal amount of __% Notes due
2002 of Litchfield Financial Corporation, a Massachusetts corporation (the
"Company"), proposed to be sold by the Company, pursuant to an Underwriting
Agreement (the "Underwriting Agreement") among the Company, McDonald & Company
Securities, Inc., J. C. Bradford & Co. and Tucker Anthony Incorporated, as
underwriters (the "Underwriters"), we have examined such corporate records and
other documents, including the Registration Statement on Form S-3, File No.
333-37963, relating to such Notes (the Registration Statement as declared
effective being hereinafter referred to as the "Registration Statement") and the
related prospectus, 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; and

          2.   The Notes, when issued under the circumstances contemplated in
               the Registration Statement, (a) will have been duly and validly
               issued by the Company, with all requisite authority and action;
               and (b) will be the legal, valid and binding obligations of the
               Company.

          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
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                                             HUTCHINS, WHEELER & DITTMAR
                                             A Professional Corporation