7 That being justified by his grace If we understand "regeneration" in its strict and ordinary meaning, it might be thought that the Apostle employs the word "justified" instead of "regenerated;" and this is sometimes the meaning of it, but very seldom; yet there is no necessity which constrains us to depart from its strict and more natural signification. The design of Paul is, to ascribe to the grace of God all that we are, and all that we have, so that we may not exalt ourselves proudly against others. Thus he now extols the mercy of God, by ascribing to it entirely the cause of our salvation. But because he had spoken of the vices of unbelievers, it would have been improper to leave out the grace of regeneration, which is the medicine for curing them.
Still this does not prevent him from returning immediately to praise divine mercy; and he even mingles both blessings together — that our sins have been freely pardoned, and that we have been renewed so as to obey God. This, at least, is evident, that Paul maintains that "justification," is the free gift of God; and the only question is, what he means by the word justified. The contest seems to demand that its meaning shall be extended further than to the imputation of righteousness; and in this larger sense it is seldom (as I have said) employed by Paul; yet there is nothing that hinders the meaning of it from being limited to the forgiveness of sins.
So he's drawing a strong connection between 'Regeneration' in 3:5 and 'Justification' in 3:7. And he's saying that 'Justification' can sometimes have a broader sense, which captures not only the declaring-right, but also the transformed life which flow from that.
I think that's what he's saying.
