In a small saucepan, melt the butter over medium heat.
Whisk in the flour until dissolved and smooth.
Slowly whisk in the milk. Low heat to medium low and simmer for several minutes until it begins to thicken.
Stir in the chili powder, garlic powder, and salt.
Stir in the grated cheddar cheese until melted and smooth. Serve warm. Can be stored in an airtight refrigerator for up to a week and reheated as needed.