Melt 1/4 c. butter in a small saucepan. Stir in 1/4 c. flour until combined. Add 2 c. milk. Boil until thickened, stirring frequently.
Use microwave to melt 1/2 c. butter. Add 1 tsp salt, 1/4 tsp pepper, and 1/2 c. chopped onion. Mix in 8 oz softened cream cheese. Stir until all ingredients are combined (sometimes it helps to warm it a little in the microwave).
Add cream cheese mixture to milk mixture and stir until combined. Pour entire mixture over hash browns and stir.