Born again from above, reviewing John 3

John 3King James Version (KJV)1 There was a man of the Pharisees, named Nicodemus, a ruler of the Jews:
2 The same came to Jesus by night, and said unto him, Rabbi, we know that thou art a teacher come from God: for no man can do these miracles that thou doest, except God be with him.

Nicodemus, the Teacher of Israel, was apologizing for those Pharisees who believed that Jesus produced His miracles by the help of Baal. He therefore assured Jesus that he believed that Jesus was sent by God. In other words, that Jesus is the Messiah.

However, Nicodemus is not one of Christ's chosen. Therefore Jesus speaks to him in parables:

Matthew 13:12-14

King James Version (KJV)12 For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath.13 Therefore speak I to them in parables: because they seeing see not; and hearing they hear not, neither do they understand.14 And in them is fulfilled the prophecy of Esaias, which saith, By hearing ye shall hear, and shall not understand; and seeing ye shall see, and shall not perceive:

Jesus did that in order that Nicodemus be in need of the Church, which Jesus was establishing, with the Apostles as the foundation. And Nicodemus would need to go to them for understanding of His Teachings.

3 Jesus answered and said unto him, Verily, verily, I say unto thee, Except a man be born again, he cannot see the kingdom of God.

Note that Jesus did not address what Nicodemus (Nic) said. Nicodemus was speaking of Jesus and His miracles. And of the fact that Jesus was united with God.

But Jesus turned it around on Nic and said, in order for you also to accomplish the works of God and to be united to God, you must be born again. This is something which Nic should have known. For Nic was a Teacher of Israel and should have known that it takes a conversion of the heart, a new birth, in order to be united to God:

Ezekiel 18:31

King James Version (KJV)31 Cast away from you all your transgressions, whereby ye have transgressed; and make you a new heart and a new spirit: for why will ye die, O house of Israel?

4 Nicodemus saith unto him, How can a man be born when he is old? can he enter the second time into his mother's womb, and be born?

But, perhaps because he was nervous. After all, he didn't want to be seen with Jesus and was sneaking around at night. But Nic didn't understand the reference to being born again in the Spirit.

So, Jesus said to him:

5 Jesus answered, Verily, verily, I say unto thee, Except a man be born of water and of the Spirit, he cannot enter into the kingdom of God.

Now, the reference to water is a reference to the flesh. Being born of woman. Have you ever heard of the term, "her water broke"? It happens in every human birth.

And being born of the Spirit, is a reference to God giving the man new life and a new heart. Conversion.

Jesus explains further:

6 That which is born of the flesh is flesh; and that which is born of the Spirit is spirit.
7 Marvel not that I said unto thee, Ye must be born again.
8 The wind bloweth where it listeth, and thou hearest the sound thereof, but canst not tell whence it cometh, and whither it goeth: so is every one that is born of the Spirit. 

The wind bloweth where it listeth.  Sometimes worded, the Spirit blow where it will.  In essence this is the Catholic Teaching that God is not constrained by His Sacraments.  In this excerpt of John 3, Jesus has tied the Baptism of the Holy Spirit to the Sacrament of Baptism.  But He is careful to acknowledge that God will act outside the Sacraments, as well.  A good example is St. Cornelius:

Acts 10:44 While Peter yet spake these words, the Holy Ghost fell on all them which heard the word.

45 And they of the circumcision which believed were astonished, as many as came with Peter, because that on the Gentiles also was poured out the gift of the Holy Ghost.46 For they heard them speak with tongues, and magnify God. Then answered Peter,47 Can any man forbid water, that these should not be baptized, which have received the Holy Ghost as well as we?48 And he commanded them to be baptized in the name of the Lord. Then prayed they him to tarry certain days.

But Nic is still a few steps behind. Apparently taking Jesus literally:

9 Nicodemus answered and said unto him, How can these things be?

And so Jesus scolds him and tells him that He is God, who has descended from heaven in order to ascend back again.

10 Jesus answered and said unto him, Art thou a master of Israel, and knowest not these things?
11 Verily, verily, I say unto thee, We speak that we do know, and testify that we have seen; and ye receive not our witness.
12 If I have told you earthly things, and ye believe not, how shall ye believe, if I tell you of heavenly things?
13 And no man hath ascended up to heaven, but he that came down from heaven, even the Son of man which is in heaven.
14 And as Moses lifted up the serpent in the wilderness, even so must the Son of man be lifted up:
15 That whosoever believeth in him should not perish, but have eternal life.

And save those who believe in Him in the process.