Absolutely. The way to do it is exactly like a standard FHA loan, but use the improved value instead of the purchase price. That way, the 3.5% downpayment and the UFMIP will be calculated correctly. Make sure to show net worth for the long term analysis point so that you get the positive advantage of the improved value.
The following video will walk you through the data entry portion for a 203k - https://www.youtube.com/watch?v=L7Gq52AOp0I