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Romans 4:1-3 meaning
It is important to bear in mind that the Apostle Paul did not divide his letter into chapters and verses; those were added much later as a convenience for study. Even though there is a break between chapters 3 and 4, there is not a break in the stream of Paul's argument. Paul has just made the case that God is the only one whose actions affect our justification before Him, and we as humans simply accept that justification by faith. That is true of both Jew and Gentile alike.
Paul then went further, claiming this gospel of grace he has spread (that faith alone is the basis upon which humans can be justified before God) does not set aside the law of Moses, as the competing Jewish "authorities" have asserted to the Gentile believers in Rome (Romans 3:8). Just the opposite, Paul says. In fact, faith establishes the law of Moses (Romans 3:31). When we walk by faith, we fulfill the law.
Paul now introduces a new subject. Having addressed the false claims the competing Jewish "authorities" made about what Paul teaches about the law, Paul now turns to the greatest family figure in Judaism, the Patriarch of Israel, Abraham. Paul asks what Abraham can teach us: Will what we know about Abraham support Paul's claims, or does what we know about Abraham support the claims of these "slanderers"?
Paul is defending allegations against his gospel, slanderous allegations that include a claim that Paul is setting aside the law as well as the relevance of Israel. The disagreement is between the competing Jewish "authorities" and Paul. Paul claims Apostleship appointed directly by Jesus, with specific authority over Gentile believers, including those in Rome (Romans 1:4-6). That is likely a reason his opponents specifically attack his claim of authority.
Now, Paul embarks on a new line of argumentation surrounding the father of Israel, Abraham, the friend of God (James 2:23). What then shall we say that Abraham, our forefather according to the flesh, has found (v 1)? The competing Jewish "authorities" who have slandered Paul's gospel message, claim that adherence to the law is a necessary component of being righteous before God. "God does His part, we do ours" is the basic argument of Paul's enemies.
It is likely that the philosophical basis for this position of Paul's opponents started with the Pharisees. At the Great Council of Acts 15, we see Pharisees, who have believed in Jesus, maintain that Gentiles must be circumcised and adhere to Jewish laws in order to be saved, to be righteous before God (Acts 15:5). Paul stands firm in his gospel of righteousness through faith alone. Although he has not been to Rome yet, his former ministry partners Aquila and Priscilla are there, no doubt teaching the same gospel message. Aquila and Priscilla were fellow Jews who labored with Paul while having been exiled from Rome, but are now returned to their home where they lead a church (Romans 16:3; Acts 18:2, 18, 26). It seems probable that they are also contending with these Jewish "authorities" who are arguing for righteousness through the law. Paul's letter is probably intended to support them in their efforts to teach the Roman believers that they don't have to follow the Jewish laws to be saved.
The Apostle Paul begins this new argument based on Abraham, our forefather with the statement in verse 2, directly challenging the assertions of his detractors: our Father Abraham was justified before God only by faith.
For if Abraham was justified by works, he has something to boast about, but not before God (v 2). Paul will now argue that the Scripture clearly teaches that Father Abraham himself was not justified before God by any deeds, or any rule-following, but by faith alone.
It is worth mentioning that Abraham's faith was indeed justified before men by his deeds. In fact, the book of James says quite plainly that Abraham was justified by his works when he offered Isaac (James 2:21). But the context in James 2 is talking about faith being observed by other people. Here in Romans 4, Paul is speaking of deeds being observed by God. And Paul clearly states that while Abraham was justified by works in the sight of men, he was not justified in any way before God.
To determine what the word "justify" means in any context we always must evaluate three parts: the standard, what is measured, and the judge. A "center justified" text has a standard (the center of the page), it has observers (the readers), and it has editors that judge whether the text is in fact in the center.
A defendant in a court of law has a standard that is the law they are accused of breaking. The defendant is the one being measured, and the judge is doing the judging. When other men judge Father Abraham against a standard of being faithful compared to other men, Abraham comes out with an A+. When God measures any human against His standard, Abraham, as well as every other human, is found wanting (Romans 3:23).
The only way humans can observe faith in action is when it is being exercised through deeds. Paul does not contest this in the least. Since James was one of the earliest New Testament letters, it is even possible Paul writes this first part of chapter 4 having the James 2 passage in mind that asserts Abraham was justified when he offered Isaac.
Who would want to get into a bragging contest with Abraham over who had exercised the most faith? No one; Abraham is the father of faith (Romans 4:16). Abraham could ask: "Did you leave everything behind to go to a new country? I did." Abraham could say, "Did you believe God could give you a large number of children when you were past childbearing age? Did you offer your only son because you believed God would raise him from the dead?" Abraham can boast of all these things, so he has a lot to boast about—before men, but not before God.
Paul is a man of the Word. He appeals to Scripture for his arguments. Here, Paul quotes from Genesis 15:6, which says that God counted Abraham as righteous because Abraham believed what God told him. For what does the Scripture say? "Abraham believed God, and it was credited to him as righteousness" (v 3).
Paul's statement Abraham believed God and it was credited to him as righteousness is a quote from Genesis 15:6. The context of Genesis 15 relates to God promising Abraham that He would give Abraham a great number of descendants, like the number of stars in the sky: too many to count. God promised this at a time when Abraham was past childbearing age. Abraham believed God's promise. He therefore believed in a resurrection of sorts, that a body devoid of life-giving power would give life.
Abraham's belief alone is what caused God to account Abraham as being righteous before Himself. This is an example Paul uses of what justifying faith looks like, but it was not the first time Abraham believed and was justified. In Acts 7, we are told that God appeared to Abraham while he lived in Mesopotamia and Abraham believed God then. Jesus tells us that the faith required to be justified by God and credited with righteousness is simply enough faith to look upon Jesus on the cross, hoping to be delivered from the poisonous venom of sin (John 3:14-15).
The root of the Greek word translated credited ("logizoami") in the phrase and [his faith] was credited to [Abraham] as righteousness carries the notion of someone making a judgment about something based on his own evaluation. "I have decided something is a certain way" is the idea. The first occurrence of "logizoami" is in Mark 11:31, translated "reasoned," "considered," or "discussed." In Luke 22:37 the same word is used when Jesus is said to be numbered or reckoned with transgressors, a prophecy that was fulfilled when Jesus was condemned to be crucified along with criminals.
In the case of God with Abraham, God looked at Abraham's belief in His promise and made a judgment by saying, "I now declare Abraham is in righteous standing before Me." Paul asserts that this is the only way to become righteous before God, for God to declare you as righteous because you believe Him. God is a discerner of our innermost thoughts, even to the division of soul and spirit (Hebrews 4:12). He decides. But fortunately, the amount of faith needed is only enough to look and hope (John 3:14-15).
Paul has already conclusively proven (again through Scripture) that no one can ever be righteous before God by keeping the law (Romans 3:9-20). No one will ever stand before God and be able to make a winning defense. No one can make demands of God. All we can do to become righteous in God's sight is to believe, to trust in His grace.
In Galatians 3:17, Paul points out that the law came 430 years after the time of Genesis 15 (Galatians is a letter that addresses the same dispute with the same competing Jewish "authorities" as Paul deals with in Romans). That makes clear that the law had nothing to do with Abraham being credited by God as being righteous. He was credited as righteous simply because he believed God.