declared righteous (or just) by faith

Romans 4:16-25

Observe:
"Faith" is a key word in this passage again. It is contrasted with "law" a little bit (not as much as in previous passages). Abraham continues to be a key person - he is the father of us all in that he had faith and was given righteousness just as we have faith and are given righteousness by God. "Credited" and "righteousness" are key words as well, especially at the end of the passage.
I also notice a bit of an idealistic picture when it comes to Abraham: he never wavered in his faith in regard to the promise of God that he would be the father of many nations. However, the story of Abraham shows that he did have a few crises of faith: he lied about Sarah being his wife and he tried to make God's promise come through human measures like having sex with his wife's maid. Obviously Paul is using a bit of hyperbole to prove his point.
There is a great image of hopelessness in this passage: Abraham was as good as dead and Sarah's womb was old and barren and yet Abraham still had faith. This shows me that God's work depends on God's ability not on my (or anyone else's) perceived ability.

Interpret:
Paul is summing up the first part of his argument or thesis: The just will live by faith. Here, Paul has proved, using the example of Abraham, that righteousness (be declared just) comes from God through faith, not through works. He has shown that no one can be declared righteous by works (Romans 3) because there is no one who does good, that no one can be declared righteous through the law because the law brings condemnation (Romans 3:20) and that all are guilty of breaking God's standards whether they have the written law or not (Romans 1-2; 3:23). Abraham is his final witness in this part of his argument: he was declared righteous not because he was circumcised or because he followed the law but because he believed God. Therefore, righteousness is by faith and we are declared just by faith in God who raised Jesus (who was delivered to death for our sins and raised again for our justification) from the dead. From here, Paul will talk about how we have life and how we should live in light of this amazing truth.

Apply:
There is not a tonne of practical application to this teaching - it is very philosophical and theological. However, it does speak to an attitude adjustment that I need to continue to make: I have been declared righteous and just, not by any merit of my own but by the merit of God. My righteousness speaks of God's character and ability. The fact that I have been made just speaks to the fact that I am helpless and hopeless apart from the death and resurrection of Jesus Christ and the grace of God.