Romans 4:16 "For this reason it is by faith, in order that it may be in accordance with grace"

Paul's argument for faith that is credited as righteousness is necessary to salvation being by grace.  Grace is unmerited favor and God has demonstrated His grace by giving us forgiveness of sin and the righteousness of Christ as a gift.  It is by faith, because it is given by grace.  If it was because of something we've done (anything we've done) then it is no more grace, but what is due or owed. (Romans 4:4)

This leads into the question, "What about believing?  Isn't that doing something to be rewarded by God?"  This is not a problem for a reformed view of salvation since God grants faith and repentance as a gift.  The entirety of salvation, faith, repentance, forgiveness, imputed righteousness... it is all a gift from God so that no one can boast.  Ephesians 2:8-9.