In a heavy-bottomed 3-4 quart saucepan, melt the butter over medium heat. Once melted, add the all-purpose flour and whisk constantly for 1-2 minutes until a smooth paste (roux) forms and cooks slightly.

Gradually whisk in the whole milk, a little at a time, ensuring no lumps form. Continue to whisk as the mixture heats and thickens, about 3-5 minutes, until it's smooth and coats the back of a spoon.

Reduce the heat to low. Add the cubed cream cheese and stir with a whisk or wooden spoon until it has fully melted and the sauce is smooth.

Add the shredded sharp cheddar cheese and Monterey Jack cheese, a handful at a time, stirring constantly until each addition is fully melted and incorporated before adding more. Keep the heat on low to prevent the cheese from seizing or burning.

Once all the cheese is melted and the dip is creamy, stir in the drained diced green chiles, smoked paprika, garlic powder, onion powder, ground cumin, salt, and black pepper.

Taste the dip and adjust seasoning as needed. If the dip is too thick, you can add a tablespoon or two of milk until it reaches your desired consistency. Serve hot in a serving bowl, garnished with fresh diced jalapeño and chopped cilantro, if desired. Serve with tortilla chips, vegetable sticks, or crackers.