UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported):    September 11, 2008
                                                  ------------------------------

                     FIRST LITCHFIELD FINANCIAL CORPORATION
             -------------------------------------------------------
               (Exact name of registrant as specified in charter)


           Delaware                      0-28815                 06-124132
--------------------------------------------------------------------------------
(State  or other  jurisdiction   (Commission File Number)      (IRS Employer
       of incorporation)                                     Identification No.)


13 North Street, Litchfield, Connecticut                            06759
--------------------------------------------------------------------------------
(Address of principal executive offices)                          (zip code)


Registrant's telephone number, including area code:  (860) 567-8752
                                                     --------------


--------------------------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)

Check the  appropriate  box below if the Form 8-K is intended to  simultaneously
satisfy the filing  obligations  of the  registrant  under any of the  following
provisions (see General Instructions A.2. below):

[_]   Written  communications  pursuant to Rule 425 under the Securities Act (17
      C.F.R. 230.425)

[_]   Soliciting  material  pursuant  to Rule 14a-2 under the  Exchange  Act (17
      C.F.R. 240.14a-12)

[_]   Pre-commencement  communications  pursuant  to  Rule  14d-2(b)  under  the
      Exchange Act (17 C.F.R. 240.14d-2(b))

[_]   Pre-commencement  communications  pursuant  to  Rule  13e-4(c)  under  the
      Exchange Act (17 C.F.R. 240.13e-4(c))

<PAGE>


Form 8-K, Current Report
First Litchfield Financial Corporation

Section 8.     Other Events

      Item 8.01.     Other Events

      First Litchfield Financial  Corporation ("FLFC" or the "Company"),  parent
company of The First National Bank of Litchfield ("Bank"),  announced today that
the U.S.  Government's  actions with respect to Fannie Mae and Freddie Mac would
adversely  impact  the  value of  FLFC's  preferred  stock  investments  in both
agencies.

      On September  7, the U.S.  Treasury,  the Federal  Reserve and the Federal
Housing Finance Agency (FHFA) announced that the FHFA was putting Fannie Mae and
Freddie  Mac  under  conservatorship  and  giving  management  control  to their
regulator,  the FHFA. Key provisions of the U.S.  Government's Plan announced to
date were as follows:

      o     Dividends on Fannie Mae and Freddie Mac common and  preferred  stock
            were eliminated.
      o     Fannie Mae and Freddie Mac will be required to reduce their mortgage
            portfolios over time.
      o     The U.S.  Government  agreed  to  provide  equity  capital  to cover
            mortgage defaults in return for $1 billion of senior preferred stock
            in Fannie Mae and Freddie Mac and warrants for the purchase of 79.9%
            of the common stock of Fannie Mae and Freddie Mac.
      o     The U.S.  Government  also  announced  that the U.S.  Treasury would
            provide  secured loans to Fannie Mae and Freddie Mac as needed until
            the end of 2009  and  that  the  U.S.  Treasury  plans  to  purchase
            mortgage  backed  securities  from Fannie Mae and Freddie Mac in the
            open market.

      As of June 30, 2008,  FLFC owned preferred stock in Fannie Mae and Freddie
Mac with a carrying  value of $5 million.  FLFC does not own any common stock or
other equity securities issued by Fannie Mae or Freddie Mac.

      The impact of the Government's actions described above and concerns in the
market  place about the future  value of the  preferred  stock of Fannie Mae and
Freddie Mac have caused values for these investments to decrease materially.  It
is unclear when and if the value of the investments  will improve in the future.
Given   the   above   developments,   FLFC   expects   to   record  a   non-cash
other-than-temporary  impairment  on these  investments  for the quarter  ending
September 30, 2008.

      Management  has  evaluated  the capital  condition  of the Company and has
concluded the Company will remain above the highest  regulatory capital level of
"well  capitalized"  under any valuation  scenario  involving the Fannie Mae and
Freddie Mac preferred  stock holdings.  Management  continues to evaluate all of
its options related to these securities.

<PAGE>

                                   SIGNATURES

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereto duly authorized.


Dated: September 11, 2008                FIRST LITCHFIELD FINANCIAL CORPORATION


                                         By: /s/  Carroll A. Pereira
                                             ----------------------------------
                                                  Carroll A. Pereira
                                                  Treasurer