Luther on sin and grace
Even at an early stage in his career Luther grasped the fact that sin and righteousness can exist together in the Christian believer, so that he may be described as a sinner as well as a saint.
The following quotation is from his Lectures on Romans (1515-16).
“Since the saints are always conscious of their sin, and seek righteousness from God in accordance with his mercy, they are always reckoned as righteous by God (semper quoque iusti a deo reputantur). Thus in their own eyes, and as a matter of fact, they are unrighteous. But God reckons them as righteous on account of their confession of their sin. In fact, they are sinners; however, they are righteous by the reckoning of a merciful God (Re vera peccatores, sed reputatione miserentis Dei iusti). Without knowing it, they are righteous; knowing it, they are unrighteous. They are sinners in fact, but righteous in hope (peccatores in re, iusti autem in spe)...
It is like the case of a man who is ill, who trusts the doctor who promises him a certain recovery and in the meantime obeys the doctor’s instructions, abstaining from what has been forbidden to him, in the hope of the promised recovery (in spe promissae sanitatis), so that he does not do anything to hinder this promised recovery...Now this man who is ill, is he healthy? The fact is that he is a man who is both ill and healthy at the same time (immo aegrotus simul et sanus). As a matter of fact, he is ill; but he is healthy on account of the certain promise of the doctor, who he trusts and who reckons him as healthy already, because he is sure that he will cure him. Indeed he has already begun to cure him, and no longer regards him as having a terminal illness. In the same way, our Samaritan, Christ, has brought this ill man to the inn to be cared for, and has begun to cure him, having promised him the most certain cure leading to eternal life...Now is this man perfectly righteous? No. But he is at one and the same time a sinner and a righteous person (simul iustus et peccator). He is a sinner in fact, but a righteous person by the sure reckoning and promise of God that he will continue to deliver him from sin until he has completely cured him. And so he is totally healthy in hope, but a sinner in fact (sanus perfecte est in spe, in re autem peccator). He has the beginning of righteousness, and so always continues more and more to seek it, while realizing that he is always unrighteous.