Luther and the concept of imputed righteousness
The striking difference between Catholic and Protestant’s understanding on how the righteousness of God is applied to us is whether it is infused in us (Catholic) or it is imputed on us (Protestant). Imputed righteousness implies that we use alien righteousness, in this case the one that belongs to Christ, to cover our unrighteousness or we are both righteous (using that of Christ) and unrighteous at the same time. Luther developed this concept of imputed righteousness as attested in his own words (emphasis added):
Here a theological question arises. How can we become “purer than snow” even though the remnants of sin always cling to us? I answer: I have always said that man is divided into spirit and flesh. Therefore as far as the total man is concerned, there remain remnants of sin or, as Paul calls them (2 Cor. 7:1), “defilements of body and spirit.” Defilements of the spirit are doubt about grace, imperfect faith, murmurings against God, impatience, imperfect knowledge of the will of God, and the like. Defilements of the flesh are adultery, lusts, murder, brawls, and the like. The defilements of the spirit are increased in the world through heretics, the defilements of the flesh through other offenses, so that both spirit and body are polluted. Because of these defilements we are never as pure and holy as we really should be. Still we have obtained Baptism, which is most pure; we have obtained the Word, which is most pure; and in the Word and Baptism we have by faith obtained the blood of Christ, which is surely most pure. According to this purity, which in spirit and faith we have from Christ and from the Sacraments that He instituted, the Christian is rightly said to be purer than snow, purer than the sun and the stars, even though the defilements of spirit and flesh cling to him. These are concealed and covered by the cleanness and purity of Christ, which we obtain by hearing the Word and by faith.
We should note diligently that this purity is an alien purity, for Christ adorns and clothes us with His righteousness. So if you look at a Christian without the righteousness and purity of Christ, as he is in himself, even though he be most holy, you will find not only no cleanness, but what I might call diabolical blackness. Yet what does the pope do in his teaching but separate us from Christ, rob us of Baptism, the hearing of the Gospel, and the promises of God, and leave us by ourselves? This is to rob man of all purity and to leave nothing but sin. Therefore if they ask: “Sin always clings to man; how, then, can he be washed so as to make him whiter than snow?” you reply: “We should look at a man, not as he is in himself, but as he is in Christ. There you will find that believers are washed and cleansed by the blood of Christ. Who is so profane as to deny that the blood of Christ is most pure? So why should a believer doubt his purity? Because he still feels the remnants of sin in himself? But all purity must be this alien purity of Christ and His blood. It must not be our own, which we put on ourselves.” In a household, is not the son the heir of the father? (Gal. 4:1, 2.) Yet because of his immaturity he is carried, cared for, and ruled by a mere maid. If you look at the carrying here, is not the son, who is the heir, the servant of the maid, whom he is forced to obey? Yet he does not stop being the heir, for he is descended from the father and not from the maid. We should evaluate the Christian the same way and look at him as he was brought out of Baptism, not as he was born of his parents. Regeneration is stronger than the first birth, because it is not from man but from God and His promise, which our faith grasps, as the prophet now shows more fully.
Luther’s Works Vol. 12, pages 366 – 367