I have read a view posts arguing on the basis of the Greek wording and meaning in defense of the Reformed position of Eph. 2:8, however, as important as word study may be, I think a correct understanding of this verse will be missed if we do not take verse 9 - “not as a result of works, so that no one may boast” - into consideration. The phrase “that not of yourselves; it is the gift of God” is understood better in relation to verse 9, which would mean that which is not due to any works in relation to Law or as obtaining merit. Therefore, if this is a fair assessment of verse 8 and 9 taken together (and I believe it is), the phrase does not refer to “faith.” It seems that the apostle is here arguing for a contrast primarily between “by grace” and “of works.” The antithesis Paul makes is always between “grace” and “works” or “faith and works,” but never between “grace” and “faith” (cf. Gal. 3:1-5; Romans 3:27,28; 11:6). Grace and faith are mutually complimentary NT ideas in opposition to works as that which obtains the divine favor. The phrase “that not of yourselves; it is the gift of God” does not seem to refer to “grace” because it already contemplates that which is given unearned and freely. It’s redundant, like saying, “For by the gift of God you are saved through faith, and that gift of God is not earned by you as a result of good works; it is the gift of God” This phrase also does not seem to refer to “faith” because the fact that salvation is “through faith” on our part necessarily makes it “by grace” on God’s part, and verse 9 seems to make a contrast, which cannot have any reference to faith (as noted above) but only to grace (Romans 3:27). Faith assumes grace as, conversely, grace assumes faith. The above considerations lead me to conclude that within the phrase “that not of yourselves; it is the gift of God,” the words “that” and “it” specifically refer to salvation itself: “ye have been saved.” Salvation is God’s gift because it is obtained “through faith” in God’s grace and not by works (verse 9); and, therefore, grace is the ultimate ground of our salvation as affirmed by the apostle Paul: "For by grace you have been saved."